APPROVED GRATUITY FUND-THE FIRST SCHEDULE 1 [PART C [See section 2(5A)-THE INCOME TAX ORDINANCE, 1984 (XXXVI OF 1984)

1. Definitions.- In this Part, unless the context otherwise requires, the expression "contribution", "employee", "employer", "regulations of a fund"and "salary" have, in relation to gratuity funds, the meaning assigned to those

expressions in paragraph 1 of Part B in relation to provident funds.

2. Approval of gratuity funds.-

[(1) The Board shall, within 3

[four months]

from the date of receipt of the application by it for according approval to any

gratuity fund, accord such approval, failing which the gratuity fund shall be

deemed to have been accorded approval, and the Board may, if, in its opinion,

the gratuity fund contravenes any of the conditions specified in paragraph 3

and the rules made by the Board in that behalf, withdraw such recognition at

any time.]

(2) An order according or withdrawing approval shall take effect from such

date as the Board may communicate in writing to trustees of the fund.

(3) The Board shall neither refuse nor withdraw approval to any gratuity fund

unless it has given the trustees of that fund a reasonable opportunity of being

heard.

 

3. Conditions for approval.- In order that a gratuity fund may receive and

retain approval, it shall satisfy the conditions hereinafter specified and any

other conditions which the Board may prescribe-

(a) the fund shall be a fund established under an irrevocable trust in

connection with trade or undertaking carried on in Bangladesh and not less

than ninety per cent. of the employees of such trade or undertaking shall be

employed in Bangladesh;

(b) the fund shall have for its sole purpose the provision of a gratuity to

employees in the trade or undertaking on their retirement or after a specified

age or on their becoming incapacitated prior to such retirement, or on

termination of their employment after a minimum period of service specified

in the regulations of the fund or to the widows, children or dependents of such

employees on their death;

(c) the employer in the trade or undertaking shall be a contributor to the fund;

and

(d) all benefits granted by the fund shall be payable only in Bangladesh.

4. Application for approval.- (1) An application for approval of gratuity fund

shall be made in writing by the trustees of the fund to the 1

[Board] and shall

be accompanied by a copy of the instrument under which the fund is

established and by two copies of the rules and, where the fund has been in

existence during any year or years prior to the financial year in which the

application for approval is made, also two copies of the accounts of the fund

relating to such prior year or years (not being more than three years

immediately preceding the year in which the said application is made) for

which such accounts have been made up. The Board may require such further

information to be supplied as it thinks proper.

(2) If any alteration in the regulations, constitution, objects or conditions of

the fund is made at any time after the date of the application for approval, the

trustees of the fund shall forthwith communicate such alteration to the Deputy

Commissioner of Taxes mentioned in sub-paragraph (1), and in default of

such communication, any approval given shall, unless the Board otherwise

orders, be deemed to have been withdrawn from the date on which the

alteration took effect.

5. Exemption of income of gratuity fund from tax.- Income derived from

investments or deposits of an approved gratuity fund and any capital gains

arising from the transfer of capital assets of such fund shall be exempt from

payment of tax.

6. Treatment of contribution by employer.- Any sum paid by an employer as

contribution towards an approved gratuity fund shall be deducted in

computing his income, profits and gains for the purposes of assessment.

7. Contributions by employer, when deemed to be his income.- Where any

contributions by an employer (including the interest thereon, if any) are

repaid to the employer, the amount so repaid shall be deemed for the

purposes of tax to be the income of the employer for the income year in

which they are so repaid.

8. Particulars to be furnished in respect of gratuity funds.- The trustees of

an approved gratuity fund and any employer who contributes to an approved

gratuity fund shall, when required by notice from the Deputy Commissioner

of taxes, furnish, within such period as may be specified in the notice, such

return, statement, particulars or information as the Deputy Commissioner of

Taxes may require.

9. Provisions of this Part to prevail against regulations of the fund.- Where

there is a repugnance between any regulation of an approved gratuity fund

and any provision of this Part or of the rules made there under , the said

regulation shall, to the extent of repugnance, be of no effect, and the Board

may, at any time, require that such repugnance shall be removed from the

regulations of the fund.

10. Provisions relating to rules.- In addition to any power conferred in this Part,

the Board may make rules-

(a) prescribing the statements and other information to be submitted along

with an application for approval;

(b) limiting the ordinary, annual, and other contributions of an employer to

the fund;

(c) regulating the investment or deposit of the money of an approved gratuity

fund;

(d) providing for withdrawal of the approval in the case of a fund which

ceases to satisfy the requirements of this Part, or the rules made thereunder;

and

(e) generally, to carry out the purposes of this Part and to secure such further

control over the approval of gratuity funds and the administration of gratuity

funds, as it may deem requisite.]