contribution to URPF

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vikas verma (Querist)
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22 December 2010 contribution to unrecognized provident fund is disallowed while compuitng business income.

But if the fund gets recognized with retrospective effect, will the previously disallowed contribution be allowed subsequently????????
please answer asap

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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23 December 2010 Since at the time when the contribution was made, position was clear that the contribution is disallowable under the law.

We have to go through the following instance-
In case of approved scientific institutions,
if an assessee makes any contribution, he is eligible to get deduction. Consequently, after contibuting the amount, due to certain reasons if the approval is withdrawn by the competent authority, then also the assessee is eligible to get the (weighted) deduction.

on the same logical grounfd I opine that amount once disallowed, in the context of then existing circumstances, will not be come allowable, even though retrospective changes have taken place.

vikas verma

vikas verma (Querist)
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24 December 2010 but sir if the same can be taxable for employees as a transferred balance then why not the deduction can be claimed

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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24 December 2010 I think the transferred balance will also be taxable in the year in which the fund has been recognised and it will not be done retrospectively.

vikas verma

vikas verma (Querist)
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24 December 2010 BUT SIR THE CALCULATION FOR TRANSFERRED BALANCE IS DONE AS IF THE FUND WAS RECOGNISED FROM THE DATE OF INSTITUTION THEREFORE CALCULATION IS DONE RETROSPECTIVELY

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