Rule 80 : Exemption from tax when recognition withdrawn
(Part XII : Recognised Provident Funds)
If the Chief Commissioner or Commissioner withdraws recognition from a provident fund, the balance to the credit of each employee at the end of the financial year prior to the date of the withdrawal of recognition shall, subject to the provisions of rule 9 of Part A of the Fourth Schedule, be paid to him free of tax at the time when such employee receives the accumulated balance due to him. The remainder of the accumulated balance due to him shall be liable to tax as if the fund had never been recognised.
Reference/Source: Check at Income Tax site for latest version of the Rules - link
This page was last updated on 17th October 2016.