Notification No. 003

What this is

Notification No. 003 was published on 15 January 2007. Its subject is S.O. (E).-In exercise of the powers conferred by section 295 read with rule 3 of Part A of the Fourth Schedule to the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules.

This amends the Income-tax Rules. What it changes is the Rules, not the Act — and a rule can never take away what the section gives.

What it does

In exercise of the powers under section 295 read with rule 3 of Part A of the Fourth Schedule to the Income-tax Act, 1961, the Central Board of Direct Taxes makes the Income-tax (First Amendment) Rules, 2007 amending the Income-tax Rules, 1962 on recognised provident funds. In the Explanation to rule 67A the words "dependent parents, sisters and minor brothers" are substituted by "dependent parents". A new rule 71A is inserted providing that the conditions in rules 68, 69, 70 and 71 shall not apply to withdrawals made after 1 April 2007 from a fund fulfilling the conditions in sub-rule (ea) of rule 4 of Part A of the Fourth Schedule. Rule 74 is amended: sub-rule (4) is substituted to require the trustees to furnish an abstract of each employee's individual account for the financial year or other accounting period to the assessing officer not later than 15 June each year, and a new sub-rule (6) requires every employer, as soon as possible after the close of each financial year, to send each member a statement of account showing opening balance, contributions, interest credited or debited and closing balance. Rule 77 is amended so that the application for recognition must be furnished in Form No. 40C, verified in the manner specified in that Form, and a new sub-rule (5) requires funds recognised on or before 31 March 2006, or which applied before this notification, to make a fresh application in Form No. 40C through the assessing officer. Rule 79 is substituted to allow the Chief Commissioner or Commissioner to withdraw recognition where the fund fails the conditions in Part A of the Fourth Schedule or where exemption under section 17 of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 is withdrawn under sub-section (4) of that section, after giving the employer and the trustees an opportunity to show cause. Form No. 40C is inserted in Appendix II after Form No. 40B.

Who it reaches

• trustees of recognised provident funds
• employers maintaining such funds for their employees
• members of recognised provident funds making withdrawals
• Chief Commissioners and Commissioners exercising the power to withdraw recognition
• assessing officers receiving the annual abstract in rule 74

The provisions it speaks to

The instrument, as the Board published it

NOTIFICATION NO. 3/2007, DATED 15-1-2007

S.O. (E).-In exercise of the powers conferred by section 295 read with rule 3 of Part A of the Fourth Schedule to the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:–
1. (1) These rules may be called the Income-tax (First Amendment) Rules, 2007.
(2) They shall come into force on the date of their publication in the Official Gazette.
2. In the Income-tax Rules, 1962, –

in rule 67A, in the Explanation, for the words "dependent parents, sisters and minor brothers", the words "dependent parents" shall be substituted;

after rule 71, the following rule shall be inserted, namely:–

"Certain rules not to apply.
71 A. The conditions stipulated in rules 68, 69, 70 and 71 shall not apply in respect of withdrawals made after 1st April, 2007 from a fund which fulfills the conditions stipulated in sub-rule (ea) of rule 4 of Part A of the Fourth Schedule to the Income-tax Act, 1961.";
(c) in rule 74,–
(i) for sub-rule (4), the following shall be substituted, namely:–
"(4) An abstract for the financial year or other applicable accounting period of the individual account of each employee participating in a provident fund shall be furnished by the trustees to the assessing officer of the area in which the accounts of the fund are kept or if the accounts are kept outside India, to the assessing officer of the area in which the local headquarters of the employer are situated, not later than the fifteenth day of June in each year or any other subsequent date fixed by the assessing officer. It shall be in the form prescribed in sub-rule (2) of this rule, but shall show only the totals of the various columns thereof for the financial year or other accounting period. It shall also give an account of any temporary withdrawals by the employee during the year and of the repayment thereof. Similar abstract shall also be furnished in respect of other employees participating in a provident fund who come within the purview of sub-rule (1) of rule 75.";
(ii) after sub-rule (5), the following shall be inserted, namely:-
"(6) Every employer shall, as soon as possible, after the close of each financial year, send to each member, a statement of his account in the fund showing the opening balance at the beginning of the period, amount contributed during the year, the total amount of interest credited at the end of the period or debited in the period and the closing balance at the end of the period.";
(d) in rule 77, –

in sub-rule (3), in the opening portion, for the words "The application shall contain the following information", the words, figures and letter "The application shall be furnished in Form number 40C and shall include the following information" shall be substituted;

for sub-rule (4), the following shall be substituted, namely:–

"The application in Form number 40C shall be verified in the manner specified therein.";
(iii) after sub-rule (4) as so amended, the following shall be inserted, namely:–
"(5) A fund which has been granted recognition on or before 31 st March, 2006 or has applied for recognition before the publication of this notification in the Official Gazette, shall make a fresh application in Form No. 40C through the assessing officer referred to in sub-rule (2)."
(e) for rule 79, the following shall be substituted, namely:-
"Withdrawal of recognition.
79.(1) The Chief Commissioner or Commissioner may withdraw recognition granted to a provident fund if it does not fulfil the conditions specified in part A of the Fourth Schedule to the Income-tax Act, 1961 or subsequent to grant of recognition under the Income-tax Act, 1961 the exemption granted under section 17 of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 is withdrawn under sub-section (4) of section 17 of the said Act.
(2) Before withdrawing recognition, the Chief Commissioner or Commissioner shall give an opportunity to the employer and the trustees of the fund to show cause why recognition should not be withdrawn."
(3) In Appendix-II to the Income-tax Rules, 1962 after Form No. 40B, the following Form shall be inserted, namely:–
" FORM NO. 40C [See rule 77]

Name of the Fund for which recognition under Part A of the Fourth Schedule to the Income-tax Act, 1961 is sought:

Permanent Account Number of the Fund:

Date of creation of the fund:

Name of the employer:

Address of the employer:

Business/Profession of the employer:

Principal place of business of the employer:

Total number of employees:

Number of employees employed in India:

Number of employees subscribing to the fund:

In India -

Outside India -

Place where the accounts of the funds are/will be maintained:

The number of trustees of the fund:

The name and address of the trustees:

(a) Whether it is an irrevocable trust : Yes/No

(b) If not, the reasons thereof:

Please indicate the contribution by the employee as a percentage of his salary:

Please indicate the contribution by the employer as a percentage of employee's salary:

The contribution being made/proposed to be made by the employer:

Whether the establishment is covered under Employees' Provident Fund and Miscellaneous Provisions Act, 1952

(EPF and MP Act): Yes/No
If yes,

whether covered under section 1(3) of EPF and MP Act:

whether covered under section 1(4) of EPF and MP Act:

19. (a) Whether the establishment is exempt under section 17 of the EPF and MP Act: Yes/No

If yes, please indicate the exemption number/date and enclose documentary proof:

If no, please indicate the date of application and attach proof of receipt from Employees Provident Fund Organization:

20. (a) Whether the fund was recognized under the Income-tax Act, 1961 before 31-3-2006:Yes/No
(b) If yes, please indicate the date of approval and attach a copy of letter of approval:
21. If the fund is already in existence, please furnish the following details relevant to the financial year ending prior to the date of application:

the total corpus of the fund:

investment pattern being followed [give breakup in accordance with the investment pattern prescribed in rule 67(2)]:

(c) a copy of the balance-sheet of the fund:

Whether the establishment has an approved superannuation fund. If yes, please indicate the approval number and date and indicate the authority which has granted the approval:

Whether the establishment has an approved gratuity fund. If yes, please indicate the approval number and date and indicate the authority which has granted the approval:

VERIFICATION
I/We_____, the trustees of the above named fund, solemnly declare that the information given in the application is true and correct to the best of my/our information and belief and that the documents sent herewith are the original or true copies thereof."
[F. No. 142/37/2006-TPL]

What it changes

Forms it touches. Form No. 40B, Form No. 40C

From when

the date of publication in the Official Gazette.

What to watch

• The rules come into force on the date of their publication in the Official Gazette.
• Every fund recognised on or before 31 March 2006, and every fund that had applied before publication, must make a fresh application in Form No. 40C through the assessing officer under sub-rule (5) of rule 77.
• The relaxation in rule 71A applies only to withdrawals made after 1 April 2007 and only where the fund satisfies sub-rule (ea) of rule 4 of Part A of the Fourth Schedule.
• The abstract under sub-rule (4) of rule 74 is due not later than 15 June each year, unless the assessing officer fixes a later date.
• Recognition may now be withdrawn where the exemption under section 17 of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 is withdrawn, but only after a show cause opportunity to both employer and trustees.

Where you meet it

In the trustees' annual filing of the account abstract with the assessing officer, in the fresh application for recognition in Form No. 40C, in the annual member statement the employer must issue, and in show cause proceedings before a Commissioner for withdrawal of recognition.

What it names

Forms it names. Form No. 40B, Form No. 40C

Rules it names. Rule 3, 4, 67, 67A, 71, 74, 75, 77, 79 of the Income-tax Rules, 1962. The 1962 Rules were replaced by the Income-tax Rules, 2026, which renumbered nearly everything: a rule number quoted here almost never means the same rule today.

On the same provision

• Notification No. 133/2025 [F. No. 370142/27/2025-TPL] / G.S.R 555(E) — Ministry of Finance 18 August 2025
• Circular No. 3/2025 — Income tax deduction from salaries during the financial year 2024 25 under section 192 of the income tax act 1961 20 February 2025
• Circular No. 24/2022 — Government of INDIA 7 December 2022
• Notification No. 90/2022 [F. No. 370142/31/2022-TPL (Part-2)] / SO 3703(E) — Ministry of Finance 5 August 2022
• Circular No. 4/2022 — Government of INDiA 15 March 2022
• Notification No. 11/2021 [F. No. 370142/52/2020-TPL] / GSR 155(E) — Ministry of Finance 5 March 2021

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