Employees contribution to pf (Income Tax)

This query is : Resolved

Author : Anonymous

( Author )
11 July 2012

Dear Expert,

I was undergoing a situation in which it was stated that earlier provision regarding payment of Employees Contribution for PF is changed and new provision states that such amount would be available as deduction even if it is paid after Due date of Relevant Act but before Due date for Filling Return. And earlier provision states that for claiming deduction it must be paid on or before due date of the relevant act.

So can you please guide me exactly what is the Correct Provision. ALso if new provision is valid can you please quote reference of the same.

Thank you well in advance.

HRIDAYNATH PATRA

( Expert )
11 July 2012

Correct provision in this respect is section 43B of the IT Act. If PF contribution made before the due of filling the return of income u/s 139(1), it would be admissible as deduction for that relevant assessment year. Otherwise, i.e. if PF contribution made after the due date of IT return, it would be admissible as deduction in the year of payment.

Say PF contribution for the month of Mar-12 is paid on 30/06/2012, it would be admissible in the PY 2011-12, but if that is paid on 12/11/2012 (say the assessee is a company) that amount would be admissible in the PY 2012-13.

There are so may High Court rulling and also Supreme Court rulling on this issue.

C.A Anshul Singhal

( Expert )
11 July 2012

yes agree with hridaynath

Author : Anonymous

( Author )
11 July 2012

Thank you Mr. Hridaynath and CA Anshul, but extending my querry .......

This above stated duration is for Both Employee and Employers COntribution or only For Employers Contribution, because as far as my knowledge is concerned deduction for Employees COntribution is available only if Employees Contribution is Paid till the due date of Relevant Act i.e. 20th of Next Month in case of Provident Fund. And for Employers Contribution deduction is available if it is paid Till due date of filling return.

Thank you once again

C.A Anshul Singhal

( Expert )
12 July 2012

employee& employer contribution should be paid before due of return filling then deduction will be avail;able in relevent financial year otherwise payment year.

HRIDAYNATH PATRA

( Expert )
12 July 2012

Clarification by CA Anshul is correct. There are HC rulling in this regard in the case of CIT Vs Sabari Enterprises [(2008) 298 ITR 141] by Hon'ble Karnataka High Court and in the case of CIT Vs AIMIL Limited [(2010) 321 by Hon'ble Delhi High Court, where all it has been held that even Employees Contribution to PF paid after due date as per PF act but before due date of filling return u/s 139(1) would be allowable.

Author : Anonymous

( Author )
12 July 2012

Got it,

Thank you CA Anshul and Mr. Hridaynath