Deficit in PF Trust

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This query is : Resolved

Ravi Rawat (Querist)

20 August 2009 The rules of the Trust provides that the interest shall be cedited to the members account at a rate as decided by the Board of Trustees but the rate in no case shall be less than the rate notified by the Central Govt. The deficiency shall be made good by the Employer.

The Trust has provided the interest @ 8.5% but the Income of the Trust is not suffient to meet the Interest amount

eg. The Total Interest provided by the Trust is Rs. 100,000
Income of the Trsut is Rs. 60,000
Surplus in the Income & Expenditure A/c b/f from previous year is Rs. 10,000

Now What shall be the liability of the Employer?

Rs. 40,000 (100,000-60,000)
or
Rs. 30,000 (100,000-60,000-10,000)

The rules of the trust are silent on the matter.

CA. B.SRINIVASULU

CA. B.SRINIVASULU (Expert)

21 August 2009 Rs.30000 has to be paid by the employer to the trust.

Ravi Rawat

Ravi Rawat (Querist)

21 August 2009 Thanks a lot for your reply.
But sir can you please explain why we the libility of the employer is Rs. 30,000 and not Rs. 40,000.
shouldnt we deal on year to year basis?

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)

20 July 2024 Why Rs. 30,000 and not Rs. 40,000:

The surplus from the previous year (Rs. 10,000) is available to offset part of the current year's shortfall. This reduces the amount that needs to be covered by the Employer.
The liability of the Employer is to make good the deficiency after considering the surplus from the previous year

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