311. Contribution to recognised provident fund – Trustees of funds allowed to make provision that payment to nominee will be sufficient discharge of liabilities – Clause (iv) of sub-section (1) read with rules 67A and 101A of Income-tax Rules
1. The Punjab, Haryana. and Delhi Chamber of the Commerce and Industry have approached the Board for amendment of rules 67A and 101A of the Income-tax Rules, as these rules, in case of payments to the nominee or nominees, do not give discharge to the trustees of the funds against all future claims and liabilities.
2. Under the provisions of rules 67A and 101A of the Income-tax Rules, the nominee becomes entitled to receive the monies standing at the credit of the subscriber without any specific requirement of producing probate or letter of administration to the estate of the deceased. It is left to the trustees to satisfy themselves that nominees will deal with the monies in the proper manner and if they feel it necessary they may even insist on their producing a proper grant of representation to the estate of the deceased before making the payment. The Board has, therefore, decided that the trustees of the funds may be allowed to make a provision in their provident fund rules that the payment to the nominee or nominees will be sufficient discharge of the liabilities of the trustees and no claim in future will lie. The trust deeds containing such a provision should, therefore, not be refused recognition if the other conditions prescribed under the rules are satisfied
Circular : No. 110 [F. No. 215/172-IT(A-II)], dated 13-4-1973.