Sixth Schedule – Provident, superannuation and gratuity funds
Sets the conditions for recognition and approval of employee funds, and the tax treatment of contributions and withdrawals.
Who it applies to
Employers running provident, superannuation or gratuity funds, and their employees
Structure and contents
| Part / area | What it covers |
|---|---|
| Part I | Recognised provident funds: recognition by the Commissioner; employer contribution not more than the employee's; employer contribution above one-tenth of salary or Rs 150,000 (whichever is lower) is taxable salary (rule 3); excess interest is taxable |
| Part II | Approved superannuation funds |
| Part III | Approved gratuity funds |
How it works in practice
Recognised funds are exempt (Second Schedule clause 57(3)). Payments to employees are exempt under clauses 22, 23 and 13 when the conditions are met. The employer gets a deduction only for contributions to recognised or approved funds (s.21(e)).