Exemption from production of Estate Duty Clearance Certificate by the legal heirs of deceased members of provident funds referred to in section 80C of the Income-tax Act - Income Tax - 343/1982

Exemption from production of Estate Duty Clearance Certificate by the legal heirs of deceased members of provident funds referred to in section 80C of the Income-tax Act Circular No. 343 Dated 29/5/1982 To All Controllers of Estate Duty/Commissioners of Income-tax. Sir, Subject: Exemption from production of Estate Duty Clearance Certificate by the legal heirs of deceased members of provident funds referred to in section 80C of the Income-tax Act. I am directed to refer to Board's Circular No. 263 See[1981] ITR (St.) 7. (F. No. 296/8/76-ED), dated November 29, 1979, wherein instructions were issued that the Central Board of Trustees of the Central Provident Fund could make payment to the extent of Rs. 25,000 from the balance at the credit of the deceased member of the provident fund to the claimant, without production of estate duty clearance certificate, subject to certain conditions. This procedure was also made applicable for setting the cases under the Employees' Deposit-linked Insurance Scheme, 1976, and the Coal Mines Deposit-linked Insurance Scheme, 1976. 2. The matter has been further examined and it has been decided to extend this concession to all provident funds referred to in section 80G of the Income-tax Act, 1961, subject to the following:- (i) Though the trustees can make payments up to certain limits without the production of estate duty clearance certificate, their statutory liability remains unaffected. (ii) If subsequently any amount is claimed by the estate duty authorities due to any liability arising under the Estate Duty Act, the liability would be met from the Reserve and Forfeiture Account of the Fund and realised subsequently by the trustees, wherever possible from the payees on the strength of the indemnity bond furnished by them. 3. In view of the above and in their own interest, the Trustees of the Provident Funds are advised to ensure that the following conditions are satisfied:- (i) The claimant files an affidavit to the effect that the property passing on the death of the deceased member does not attract estate duty. (ii) The claimant furnishes an indemnity bond/undertaking to indemnify the trustees of the provident fund against any liability on account of estate duty that may arise. 4. The above may please be brought to the notice of the trustees of all provident funds recognised under rule 3 of the Recognised Provident Funds Rules (Part A, Fourth Schedule to the Income-tax Act, 1961) and also to the notice of all the officers working in your charge for guidance and necessary action. Yours faithfully, (Sd.) P.K. Chopra, Under Secretary, Central Board of Direct Taxes.