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Deduction u/s 80-C

Parmod Agarwal (Assistant Manager) (394 Points)

09 March 2010

Dear All,

Our one employee PF deduction per month Rs. 12000. Hence for 12 month his deduction is Rs. 144000/- . Can he claim deduction of PF Amount Rs. 100000/- under Section 80-C.

Please clarify.

Thanks

Parmod

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22 Replies

C.Balaji (Learner) (1867 Points)
Replied 09 March 2010

Dear Parmod Agarwal sir..........

Employees Contribution to PF is eligible for Ded u/s 80C.......Restricted to Rs.100000/-......

CA Dhiraj Ramchandani (CA, M. com) (10823 Points)
Replied 09 March 2010

Hey wait, its 70000....

Not sure, coz studied two years back in PCC...

Let me confirm

CA Lovenish Bansal (JOB) (343 Points)
Replied 09 March 2010

Rs 100000

CA Dhiraj Ramchandani (CA, M. com) (10823 Points)
Replied 09 March 2010

OK THEN... HERE IT IS

5. Public provident fund (PPF): While PPF is considered as one of the best option among all the assured return schemes under section 80C, it is also subject to certain limitations:

1. Maximum contribution allowed Rs 70,000 per annum (p.a.) in all the accounts clubbed together. For example suppose you open two PPF accounts: one in your name and other in the name of your minor son. Here contribution to both the accounts will be clubbed for the purpose of limit of Rs 70,000. And if you still make a contribution in excess of Rs 70,000, section 80C deduction will not be allowed, nor will you get any interest on the excess contribution.

2. A joint account is not permissible.

3. To keep the PPF account active, a minimum annual investment of Rs 500 is required in all subsequent years.

4. It is not possible to close & withdraw the entire amount before the maturity period of 15 years except in the case of death. However, partial withdrawals can be made from 7th year onwards.

Parmod Agarwal (Assistant Manager) (394 Points)
Replied 09 March 2010

Dear Dhiraj,

There is no resiriction of PPF under the Income Tax Act. You can claim deduction of PPF Amount Rs. 100000/- but interest will be applicable on Rs. 70000/-only. Limit of Rs. 70000/- is under the PPF Scheme not in the Income Tax Act: as per Taxmann's Direct Taxes Ready Reckoner written by the

Dr. Vinod K. Singhania.

Thanks

Parmod

CA Dhiraj Ramchandani (CA, M. com) (10823 Points)
Replied 09 March 2010

But sir, the PUBLIC PROVIDENT FUND ACT itself disallows to invest more than Rs. 70000 in one year

How can u claim more than that if u r not depositing the same???

Parmod Agarwal (Assistant Manager) (394 Points)
Replied 09 March 2010

Dear Dhiraj,

You can deposit any amount of PPF but the Interest will be applicable only Rs. 70000/-.

Thanks

Parmod

1 Like

C.Balaji (Learner) (1867 Points)
Replied 09 March 2010

Dear Dhiraj bhai........

please see this link..............

https://www.thinkplaninvest.com/2010/02/provident-fundpf-us-80c/

2 Like

C.Balaji (Learner) (1867 Points)
Replied 09 March 2010

Vivek sir provided a good answer to this query........

Vivek Angrish (Manager Finance & Accounts) (232 Points)
Replied 09 March 2010

Yes, Mr. Pramod. The Employee can claim deduction of Rs.100000/- U/s. 80-C. What Mr. Dhiraj is talking about is PPF. In PPF there is a limit of depositing upto Rs. 70000/- in a financial Year. But in Recognized and Statuory P.F there is no such limit and the employee's contribution can be claimed maximum upto Rs. 1 Lac.

Mr. Dhiraj, here Mr. Pramod's question is about E.P.F and you have provided the detail of P.P.F.

But thanks for sharing the detail of PPF

So, Mr. Pramod your employee can claim deduction of Rs. 1 lac U/s. 80-c

CA Sumit Arora (CA) (1410 Points)
Replied 09 March 2010

It is Rs. 100000.

(Guest)

Hi friends,

The question was about EPF. Regarding there is no restriction on deposit. Any amount can be deposit. But under 80C deduction restricted to Rs.1,00,000.

When it come PPF there is no restriction under income tax act. But investor can deposit maxium of Rs.70,000 under the scheme.

So answer for the question is Maximum of Rs.1,00,00 under section 80C only can be claimed.