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ESIC – Form 22

ESIC – Form 22

Form 22 is a fund set up for the benefit of an employee. It is related to the tax deducted at source on approved superannuation fund. Payment made due to death or retirement is exempted from this amount.

Fourth Schedule of the Income Tax Act of 1961 governs the rules and regulations for form 22 related to the superannuation fund (SAF). It is the statement of tax deducted from the amount that is being repaid to employees with relations to a superannuation fund.

Components

Form 22 is related to the Tax Deducted for the purpose of payments being made from a superannuation fund. This form is accepted only when the case of fund has been approved.

The form is required to disclose a range of information such as

  • The name of the superannuation fund
  • The basic details of an Employee such as his name and address
  • The average rate of deduction of tax for the previous three years
  • The time duration for which a contribution has been made towards the fund by the employer
  • The breakup of the principal amount and the accrued interest
  • At the time of repayment when the total amount of tax that was deducted
  • A declaration by the trustees of the fund stating that the details furnished in the form are accurate

Laws related to Form 22 and superannuation funds 

The following are the laws which are related to superannuation but not restricted by the use of form 22  

  • Section 17 Sub-Section (2) of the Income Tax Act, 1961 related to the amount contributed by the employer being taxable at the employees end if it exceeds an amount of INR 1,00,000
  • Section 36 Sub-Section (1) (iv) where the contribution of the employer is treated as a business expense
  • Section 10 Sub-Section (13) where the benefits are paid due to the death of the employee is exempt from taxes