1009. Whether in case of a provident fund, whose income is exempt under section 10(25)(ii), established under scheme under Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, income by way of interest on securities of Central and State Governments may be paid to such provident funds without deduction of income-tax at source
1. Representations have been received for grant of exemption from the requirement of deduction of income-tax at source under section 193 of the Income-tax Act on the payment of income by way of interest on securities in case of provident funds established under a scheme framed under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 whose income is exempt under section 10(25)( ii) of the Income-tax Act, 1961.
2. The matter has been examined by the Board and it has been decided that in the case of a provident fund, whose income is exempt under section 10(25)(ii), established under a scheme under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, the income by way of interest on securities of Central and State Governments may be paid to such provident funds without deduction of income-tax at source. The provisions of this circular will be applicable from current financial year 1995-96 onwards.
Circular : No. 741, dated 18-4-1996.
