As per the provisions of the EPF, if a new employee joins a company on a salary exceeding the prescribed monthly wage ceiling and he/she is not a member of EPF at the time of joining the establishment, he/she will not be liable to become a member of the EPF.
I work for an IT company. After working in two previous companies, I withdrew my provident fund (PF) amount. I made a mistake by not letting my current employer deduct my PF. Is it possible to do so now?
We have assumed that (i) upon withdrawal of your previous provident fund balance, you ceased to be a member of the Employees Provident Fund Scheme (EPF); (ii) your salary with the existing employer exceeds the prescribed monthly wage ceiling ( ₹15,000); and (iii) you are an Indian passport holder.
As per the provisions of the EPF, if a new employee joins a company on a salary exceeding the prescribed monthly wage ceiling and he/she is not a member of EPF at the time of joining the establishment, he/she will not be liable to become a member of the EPF. However, if the employer and employee both agree, there is no bar in enrolling such an employee as a member under the EPF.
As you were not a member of the EPF and your salary exceeds the prescribed monthly wage, you and your employer were not mandatorily liable to contribute to PF.
How should we do valuation of equity shares on 1 April 2001 in case of unlisted shares if the shares were purchased prior to 2001? A reference to the section/rule of the I-T Act will be helpful.
As per Section 55 of the I-T Act, where any capital asset is acquired prior to 1 April 2001, the taxpayer can choose to consider the higher of the actual total cost incurred at the time of acquisition or the fair market value (FMV) as on 1 April 2001, as the cost of acquisition for the purpose of computation of capital gains.
While there are specific rules prescribed for the mode of computation of FMV of unlisted equity shares in the context of some other provisions of the Act, it may be noted that the mode of computation of FMV of unlisted shares for the purpose of computation of capital gains has not been prescribed in the Act.
Hence, from a documentation perspective, one may consider obtaining an FMV certificate from a registered valuer.
(Parizad Sirwalla is partner and head, global mobility services, tax, KPMG in India. Queries and views at firstname.lastname@example.org)