Employee contribution to epf /esi

Tax queries 1466 views 4 replies

Sonia

Auditor

112 Points Joined March 2009

As per Section 36(1)(va), deduction will be allowed if amount is paid on or before due date, ie date as specified in relevant act (i.e, PF/ESI Act)

However, there is contrary decision of High court in CIT Vs. AIMIL Ltd, wherein, it was decided that if actual payment is made on or before due date of return u/s 139(1), it shall be allowed as deduction.

Now, my query is in following cases, whether ESI/EPF will be allowed or disallowed in IT Act:

1) ESI of Rs. 500 due on 21.01.2012 paid on 25.01.2012

2) ESI of Rs. 1000 due on 21.04.2012 paid on 30.04.2012 (before ITR return due date)

Replies (4)

Ki$hor B

Training & Advisory

3015 Points Joined February 2012

Sonia,

Based on both my experience & on your quoted verdict,

ESIC is deductible in the two cases as per the Income Tax Act

as Date of deposit is before the Due date u/s 139(1)

CA Manish

Job

5264 Points Joined December 2010

Employee's contribution is covered by sec 36 (1)(va) for which due date is the due date as mentioned in the relevant Act. Therefore if the payment is made after due date it will be disallowed but as per the decision given by the high court in the above case if the interest and penalties for the delay in payment is made then there wont be any disallowance provided the payment is made within due date of filing return.

Employers Contribution is covered by sec 43B therefor for this de date is due date of return filing.