PF and TDS deduction on Leave encashment

This query is : Resolved

CA Gaurav Rastogi (Querist)
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01 January 2009 Dear Sir,

Do we need to deduct TDS and PF when we make provision for leave encashment at the year end when the co has or has not a policy of carry forwarding the eqarned leaves?

Thanks

Regards
Gaurav Rastogi
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O.D.SHARMA

O.D.SHARMA (Expert)
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03 January 2009 only TDS is required.PF is not mandatory for over 12 month payments in any shape

CA Gaurav Rastogi

CA Gaurav Rastogi (Querist)
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03 January 2009 Dear sir,

Kindly calrify your answer.

Thanks

Kishanlal Paliwal

Kishanlal Paliwal (Expert)
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15 October 2010 TDS is liable to deduct since the leave are the part of Salary and taxable under the provisions of Income Tax.

PF is not required to deduct from leave payment since PF is calculated on Basic salary.

In other words the leave is not form the part of Basic salary.

Regards
K.L.Paliwal