Ministry of Finance
Notification No. 95/2021 [F. No. 370142/36/2021-TPL] / GSR 604(E) was published on 31 August 2021. Its subject is Ministry of Finance.
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.
Made under the first proviso to clause (11) and the first proviso to clause (12) of section 10 read with section 295 of the Income-tax Act, 1961, the Income-tax (25th Amendment) Rules, 2021 insert a new rule 9D after rule 9C of the Income-tax Rules, 1962. Rule 9D provides that the taxable interest — interest accrued during the previous year that is not exempt under clauses (11) and (12) of section 10 by force of the first and second provisos — is to be computed as the interest accrued during the previous year in the taxable contribution account. Sub-rule (2) requires separate accounts to be maintained within the provident fund account for taxable and non-taxable contributions from the previous year 2021-22 onwards. The Explanation defines the non-taxable contribution account as the closing balance as on 31 March 2021 plus later contributions not in the taxable account plus interest on both, less withdrawals; the taxable contribution account as contributions in excess of the threshold limit made in previous year 2021-22 and later years plus interest on them, less withdrawals; and the threshold limit as five lakh rupees where the second proviso to clause (11) or clause (12) applies, and two lakh fifty thousand rupees in other cases.
MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
NOTIFICATION
New Delhi, the 31st August, 2021INCOME-TAX
G.S.R. 604(E).—In exercise of the powers conferred by the first proviso to clause (11) of section 10 and the first proviso to clause (12) of section 10 read with section 295 of 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 (25th Amendment) Rules, 2021.
(2) They shall come into force on 1st day of April, 2022.2. In the Income-tax Rules, 1962, after the rule 9C, the following rule shall be inserted, namely: ‒
"9D. Calculation of taxable interest relating to contribution in a provident fund or recognised provided fund, exceeding specified limit.- (1) For the purposes of the first and second provisos to clauses (11) and (12) of section 10, income by way of interest accrued during the previous year which is not exempt from inclusion in the total income of a person under the said clauses (hereinafter in this rule referred to as the taxable interest), shall be computed as the interest accrued during the previous year in the taxable contribution account.
(2) For the purpose of calculation of taxable interest under sub-rule (1), separate accounts within the provident fund account shall be maintained during the previous year 2021-2022 and all subsequent previous years for taxable contribution and non-taxable contribution made by a person.
Explanation: For the purposes of this rule,-
(a) Non-taxable contribution account shall be the aggregate of the following, namely:-
(i) closing balance in the account as on 31st day of March 2021;
(ii) any contribution made by the person in the account during the previous year 2021-2022 and subsequent previous years, which is not included in the taxable contribution account; and
(iii) interest accrued on sub-clause (i) and sub-clause (ii),
as reduced by the withdrawal, if any, from such account;(b) Taxable contribution account shall be the aggregate of the following, namely:-
(i) contribution made by the person in a previous year in the account during the previous year 2021-2022 and subsequent previous years, which is in excess of the threshold limit; and
(ii) interest accrued on sub-clause (i),
as reduced by the withdrawal, if any, from such account; and(c) The threshold limit shall mean:
(i) five lakh rupees, if the second proviso to clause (11) or clause (12) of section 10 is applicable; and
(ii) two lakh and fifty thousand rupees in other cases.".[Notification No. 95/2021/ F. No. 370142/36/2021-TPL]
NEHA SAHAY, Under Secy. (Tax Policy and Legislation Division)
Note: The principal rules were published in the Gazette of India, Extraordinary, Part-II, Section-3, Sub-section (ii) vide number S.O. 969(E) dated 26th March, 1962 and were last amended vide notification number G.S.R. 578(E) dated 18th August, 2021.
Uploaded by Dte. of Printing at Government of India Press, Ring Road, Mayapuri, New Delhi-110064 and Published by the Controller of Publications, Delhi-110054.
1 April 2022.
In the annual provident fund statement of account, in the interest figure an employer reports and a member returns in his return of income for assessment year 2022-23 onwards, and in any enquiry into provident fund interest offered to tax.
A member whose threshold limit is two lakh fifty thousand rupees contributes four lakh rupees in the previous year 2021-22. One lakh fifty thousand rupees goes to the taxable contribution account; the interest accruing on that account during the year is the taxable interest, while interest on the balance as on 31 March 2021 and on the first two lakh fifty thousand rupees stays in the non-taxable account.
Rules it names. Rule 9C 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.
← Notification No. 96/2021 [F.No. 370142/31/2021-TPL (Part II)] / SO 3561(E) · Notification No. 94/2021 [F.No.IT(A)/01/2020-TPL (Part-I)-(Part- I)] / S.O. 3536(E) →
Source: the Income Tax Department’s own published text — its page for this instrument.