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Pf help

vaibhav (student) (220 Points)

18 September 2013

Dear, After applicability of pf to our organisation for first two months employer born the contribution of employee too without making any deduction from the salary of employee and paid the same into the departments account. Now my question is how we should treat this contribution paid by employer (ie. Employees share)? Is it allowable and what exactly the treatment we should give in tax audit? Thank you.

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CA Dhruva Kalamanji (Chartered Accountant ) (1996 Points)
Replied 18 September 2013

accordint to section 43b

any sum payable by the assessee as an employer by way of contribution to any provident fund or superannuation fund or gratuity fund or any other fund for the welfare of employees,

and section 2 (24)(x) any anount recieved by the employer from the employee towards pf will be treated as income in the hands of employer

but in you case there no contribution by the employee hence section 2 (24) and section 36 (1) (va) will not come in to picture

and hece total amount paid by the employer towards the pf including employee fund is allowable.