Rules 293 and 294 of the Draft Income-tax Rules, 2026 prescribe detailed provisions governing provident fund nominations and maintenance of accounts. Rule 293 permits an employee to nominate one or more persons to receive the provident fund balance upon the employee’s death, with the nomination required to be made in Form No. 184. Where multiple nominees are specified, the employee must clearly indicate the share payable to each nominee so that the entire amount credited to the provident fund is covered. If the employee has a family at the time of making the nomination, the nomination must be in favour of one or more family members, and any nomination in favour of a person outside the family is invalid. However, where the employee has no family at the time of nomination, the nomination may be made in favour of any person, though it becomes invalid once the employee subsequently acquires a family, requiring a fresh nomination in favour of family members. The rule also provides that if a nominee is a minor, a guardian may be appointed, and employees may modify nominations at any time by written notice to the trustees.
Rule 294 deals with provident fund accounting requirements, mandating preparation of accounts at intervals not exceeding twelve months and maintenance of individual subscriber accounts in Form No. 185. Trustees must furnish annual abstracts of individual accounts to the Assessing Officer by 15 June each year, and employers must provide members with annual statements showing opening balance, yearly contributions, interest credited or debited, and the closing balance of the provident fund account.
Extract of Rules No. 293 and 294 of Draft Income-tax Rules, 2026
Rule 293
Nomination
(1) An employee may be permitted by the trustees of the provident fund to nominate one or more persons to receive the amount held in the provident fund in the event of the employee’s death. Such nomination shall be made in Form No. 184
(2) If an employee nominates more than one person under sub-rule (1), he shall, specify in his nomination the amount or share payable to each of the nominees in a way that covers the entire amount that may be credited to their provident fund.
(3) Where an employee has a family at the time of making a nomination, the nomination shall be in favour of one or more persons belonging to his family. Any nomination made by an employee in favour of a person not belonging to his family shall be invalid.
(4) If, at the time of making a nomination, the employee does not have a family, the nomination may be in favour of any person or persons, but if the employee later gains a family, then such nomination shall be invalid and the employee may then make a new nomination in favour of one or more persons from his family.
(5) If the nomination is in favour of a minor, whether partly or fully, the member may appoint an adult family member as the guardian of the minor nominee in the event of the member’s death. If there are no adult family members available, the member may choose any other person to be the guardian of the minor nominee.
(6) An employee may modify a nomination at any time by providing written notice to the trustees in Form No. 184. If the nominee dies before the employee, the nomination shall revert back to the employee who may then make a new nomination for that interest.
(7) A nomination or its modification shall take effect to the extent that it is valid on the date on which it is received by the trustees.
(8) For the purposes of this rule, “family” means:-
(a) in the case of a male member, his wife, his children, whether married or unmarried, his dependant parents and his deceased son’s widow and children;
(b) in the case of a female member, her husband, her children, whether married or unmarried, her dependant parents, her husband’s dependant parents and her deceased son’s widow and children.
Rule 294
Accounts
(1) The accounts of a provident fund shall be prepared at intervals of not more than twelve months
(2) An account shall be maintained for each subscriber to the fund and it shall include the particulars shown in Part-A of Form No. 185
(3) Where the accounts of a provident fund are kept outside India, certified copies of the accounts shall be supplied not later than the 15th June in each year or any other subsequent date fixed by the Assessing Officer to a local representative of the employer in India.
(4) An abstract of the individual account for the tax year of each employee participating in a provident fund shall be furnished by the trustees in Part-B of Form No. 185-
(a) to the Assessing Officer of the area in which the accounts of the fund are kept or if the accounts are kept outside India, to the Assessing Officer of the area in which the local headquarters of the employer are situated; and
(b) by the 15th June in each year or any other subsequent date fixed by the Assessing Officer;
(5) The account to be made under the provisions of paragraph 11(1) of Part A of Schedule XI shall show in respect of each employee:-
(a) the total salary paid to the employee during the period of his participation in the provident fund;
(b) the total contributions;
(c) the total interest which has accrued thereon; and
(d) so far as may be, the percentage of the employee’s salary in accordance with which contributions have been made by the employer and employee.
(6) Every employer shall, as soon as possible, after the close of each financial year, send to each member, a statement of his account in the fund showing the following details:
(a) opening balance at the beginning of the period;
(b) amount contributed during the year;
(c) the total amount of interest credited at the end of the period or debited in the period; and
(d) the closing balance at the end of the period.
