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Delay in payment of EPF

Jinesh (Article Assistant) (35 Points)

01 January 2010

If der's delay in the payment of EPF, will it be disallowed under the Income Tax Act?

And if it's disallowed, under what sec and would again be allowed under what sec?

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7 Replies

shailendra (C.A. FINAL) (189 Points)
Replied 01 January 2010

A company is under an obligation to deposit the employer's contribution and employees contribution.

As per sec 43B if there is a delay in depositing Employer's contribution and it is not deposited before filing the ROI then it will be disallowed and when it is deposited then as per sec 36 it will be allowed in that F.Y.

A per sec 36, if employees contribution is deposited late then it will never be allowed under income tax Act, even if when it is deposited.

2 Like

ashish gupta ( student) (1922 Points)
Replied 01 January 2010

agree with shailendra

1 Like

obulesu (CA FINAL) (77 Points)
Replied 01 January 2010

as per EPF ACT1952 pf is paid every month 15th of following month,if employer is fail to do it is disallowed u/s 43B of incometax act 1961.

once is disallowed is not allowed as deduction for any other section if it is paid after due date.

1 Like

RAVI KUMAR (ca) (29 Points)
Replied 01 January 2010

There are two issues in PF

a) Enployer contribution to PF

b) Employee contribution to PF

Incase of employer contribuion to PF ,if the payment is not made before due date under the PF Act ,but paid before the Due date for filing ROI The same is allowed U/s 43 B and if the payment is made after due date for filing ROI the same is allowed in the year in which the payment is made

Incase of employees contribution the amount of contribution is treated as income of employer and deduction is allowed only if the payment is made on or before due date under the PF Act .

2 Like

NARENDER PAWAR (CA final Student) (337 Points)
Replied 02 January 2010

AS PER SECTION 43B EMPLOYERS CONTRIBUTION IN EPF IS ALLOWED IF THE AMOUNT OF EPF IS DEPOSITED BEFORE THE FILLING OF RETURN OF INCOME OTHERWISE IT IS DISALLOWED, BUT IT WILL IN THE YEAR OF DEPOSITED.

AS PER SECTION 36(1) (Va). EMPLOYEES CONTRIBITION DEDUCTED BY THE EMPLOYER SHALL BE CONSIDERD INCOME OF THE EMPLOYER AND IF THE EMPLOYER HAS CREDITED THE AMOUNT TO THE PF A/C UPTO THE DUE DATE FOR PROVIDENT FUND , IT WILL BE ALLOWED TO BE DEBITED OTHERWISE IT WILL NOT BE ALLOWED TO DEBITED.