{"id":154643,"date":"2024-10-15T23:48:06","date_gmt":"2024-10-15T23:48:06","guid":{"rendered":"https:\/\/news.talkwithrattan.com\/index.php\/2024\/10\/15\/exempted-establishments-cannot-use-surplus-fund-in-their-trusts-for-crediting-interest-to-its-beneficiaries-epfo\/"},"modified":"2024-10-15T23:48:07","modified_gmt":"2024-10-15T23:48:07","slug":"exempted-establishments-cannot-use-surplus-fund-in-their-trusts-for-crediting-interest-to-its-beneficiaries-epfo","status":"publish","type":"post","link":"https:\/\/news.talkwithrattan.com\/index.php\/2024\/10\/15\/exempted-establishments-cannot-use-surplus-fund-in-their-trusts-for-crediting-interest-to-its-beneficiaries-epfo\/","title":{"rendered":"Exempted establishments cannot use surplus fund in their Trusts for crediting interest to its beneficiaries: EPFO"},"content":{"rendered":"
\"Exempted<\/div>\n
The Employees\u2019 Provident Fund Organisation has rejected the demand from exempted establishments to allow them to use surplus funds<\/a> in the in-house Trusts for crediting interest<\/a> to its beneficiaries saying it is in violation of the EPF Act and the Indian Trusts Act which enjoins them to act impartially.<\/p>\n

In a recent circular, dated October 7, the retirement fund<\/a> body has clarified that upon the cancellation or surrender of exemption for Exempted Provident Fund Trusts<\/a>, all accumulated funds<\/a>, including undistributed interest on investments, must be transferred to the EPFO<\/a>. <\/p>\n

Besides, it has directed its regional offices to conduct a compliance audit<\/a> to identify any instances of non-compliance<\/a> or improper use of reserves and surplus by exempted establishments.<\/p>\n

\u201cSuch accumulations in the reserve fund have come up in course of time utilising the accretions from several past and present beneficiaries in contravention of the Para 60 of the EPF Scheme,\u201d it said.<\/p>\n

\u201cAny sanction to allow them to distribute it amongst incumbent beneficiaries would amount to sanctioning an unjust enrichment of a few at the expense of others,\u201d it added. <\/p>\n


The fresh circular, which will supercede all existing circulars on the issue, has been issued after some exempted establishments have sought permission from regional offices of EPFO to appropriate the balance lying in the Trusts Reserves and surplus by crediting interests to the existing Trust beneficiaries at a much higher rate than declared by EPFO for its members.\u201cSuch actions by the exempted establishments have been proposed either during the time of surrender of exemption or undertaken just prior to the initiation of the surrender process,\u201d EPFO said in its circular.\u201cThese changes mandate that all accumulated funds, including undistributed interest, should be transferred to the EPFO at the time of cancellation or surrender of exemption of the private PF Trust,\u201d KMPG said on Tuesday. <\/p>\n

\u201cExempted Trusts should carefully consider these guidelines while distributing their yearly surplus,\u201d KMPG added. <\/p>\n

EPFO argued that an inflated surplus in the balance sheet of the Trust is indicative of non distribution of earnings of previous years amongst the incumbent beneficiaries proportionately. <\/p>\n

\u201cNo interest is allowed to be credited for broken periods of a year and overdrawal of reserves and surplus is not permitted at any point of time,\u201d EPFO said. <\/p>\n

Further, the rate of interest allowed to the beneficiaries of exempted trusts<\/a> should be commensurate with the earnings of the Fund, it added.
<\/p>\n<\/div>\n


\n
Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The Employees\u2019 Provident Fund Organisation has rejected the demand from exempted establishments to allow them to use surplus funds in the in-house Trusts for crediting interest to its beneficiaries saying it is in violation of the EPF Act and the Indian Trusts Act which enjoins them to act impartially. In a recent circular, dated October […]<\/p>\n","protected":false},"author":2,"featured_media":154644,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"tdm_status":"","tdm_grid_status":"","fifu_image_url":"https:\/\/img.etimg.com\/photo\/msid-114256460,imgsize-37244.cms","fifu_image_alt":"","footnotes":""},"categories":[602],"tags":[121419,46787,121418,117496,121417,15814,57399,93610,121414,5215,1120,97325,121416,7699,35446,61010,121415,11135],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/posts\/154643"}],"collection":[{"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/comments?post=154643"}],"version-history":[{"count":1,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/posts\/154643\/revisions"}],"predecessor-version":[{"id":154645,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/posts\/154643\/revisions\/154645"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/media\/154644"}],"wp:attachment":[{"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/media?parent=154643"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/categories?post=154643"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/tags?post=154643"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}