1334. Contribution received by any approved gratuity fund – Approved modes of depositing – Part C of Fourth Schedule read with rule 101/67 of Income-tax Rules

1. The Government has notified in the Official Gazette dated 9-3-1987, the Income-tax (Second Amendment) Rules, 1987. The said Amendment Rules amend the provisions of rule 101 of the Income-tax Rules, 1962 (‘the Rules’) with effect from April 1, 1987.

2. Under the existing provisions of rule 101 monies contributed to approved gratuity funds are required to be deposited in a Post Office Savings Bank Account or a current account with any sched­ule bank, or are required to be utilised for the purpose of making contributions under Group Gratuity Scheme entered into with the Life Insurance Corporation of India. To the extent such monies are not so deposited or utilised, they are required to be invested in the modes of investment specified in rule 67(2) of the Rules.

3. Under the amended provisions, the contributions received by any approved gratuity fund on or after April 1, 1987, will be required to be deposited in a Post Office Savings Bank Account or in a current account with any scheduled bank or will be required to be utilised for the purpose of making contributions under Group Gratuity Scheme entered into with the Life Insurance Corpo­ration of India. The contributions will not be permitted to be deposited in any of the modes of investment specified in rule 67(2).

Circular: No. 482 [F.No. 19/FB/87-TPL], dated 26-3-1987.

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