Statutory payment

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praful

praful (Querist)

17 June 2012 If ESIC paid after due date whether any effect in computation of income (for the year ? (section 43B)

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

17 June 2012 Section 36(1)(va) vis-a-vis Section 2(24)(x):
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Expenditure can be claimed by the employer , U/s 36(1)(va) if the sum received from the employees is being deposited/credit to the employees account on or before the due date .
.
Section 2(24)(x)
Contributions received from the employees
are treated as income of the employer as and when these are received.
.
So, an employer has to follow the prescribed due dates strictly of the respective funds which may be lying even, within the previous year itself. Soon after
the due date crosses the contribution will be treated as income U/s 2(24)(x). It does not remain an expenditure to which the employer can claim by any other way.
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Section 43B has a role to play when there remains any such expenditure, which has been claimed by the assessee but paid subsequent to the end of the previous year.
Here, as the due date of fund passes away,
the employer immediately comes into the trouble.
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