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Employees contribution towards pf

neeraj (CA) (930 Points)

11 June 2012

Late payment of Employees contribution towards PF is disallowed under which sec. ?

Is is allowed U/s 43B, if paid after due date ????????????

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9 Replies

Pulkit Sharma (CA Practice) (458 Points)
Replied 11 June 2012

no, but you can as per sabari mills case kar high court

jean (article assistant) (113 Points)
Replied 11 June 2012

late payment of employee contribution is disallowed under income tax if the contribution is not paid even after due date of filing return under sec 139.

same will be allowed next year if payment has been done after due date specified in sec 139

Roshan A (Chartered Accountant) (458 Points)
Replied 11 June 2012

Late payment disallowed if paid after due date of filling IT Returns(i.e 30th Sept)

-Sec 43B

Gunjan Tulsyan (Article) (222 Points)
Replied 11 June 2012

Yup if you pay it after due date then it should be disallowed but in case u still pay it before 30th sept in case of fy 2011-12 then u can still claim it as a deduction in ur IT Return but in case u pay it after 30th sept then u can still claim it as a deduction but in the next year as a deduction the reference would sec 139(1) and sec 43B...hope i asnwered it correctly...!!!

(Guest)

Dear Neeraj,

Late payment of employee share is disallowed u/s 36(1)(va) of the Income Tax Act, 1961 if paid after the due date specified under that act, But in the case of P.M. Electronics, the honourable high court of delhi allowed that payment if the same is deposited before the due date of filing the return of income.i.e. before 30th of September. For detail discussion refer above case.

Thanks & Regards,

Davish Dhingra

Chartered Accountant

sachin (ARTICLES) (434 Points)
Replied 12 June 2012

If Tranfer princing provision is applicable to the assesse then due date under section 139(1) is 30 nov

so if payment made after 30 nov then it is disallowed for the current year (PY) and the same is allowed in the next year

Chirag Kalra (CA Final) (42 Points)
Replied 12 June 2012

Dear all.

Firstly, I would like to bring all of yours attention to the fact that sec 43B only talks about EMPLOYERS contribution not about EMPLOYEES. Therefore, if employees contribution has been paid after due date it shall got disallowed for forever provided same has been claimed as expenditure first. Further, it will become income of the assessee u/s 2(24)(x) of the income tax act 1961 and will not be allowed as expenditure on payment basis in next year.

Secondly, on combined reading of the sec. 43B, 2(24)(x) & 36(1)(v) it may be interpreted that due date shall be the date by which assessee as an employer, is required to credit an employees‘ contribution to the employees‘ account in relevant fund. However, in some decided case laws apex court had taken its favourable view on the basis of due date which shall be the date of filing of return u/s 139(1).

Regards,

ChiraG Kalra

Chirag Kalra (CA Final) (42 Points)
Replied 12 June 2012

Dear Davish,

It is general practice of accounting that employees contribution will never be part of expenditure since it is a part of current liability. Therefore question of disallowance of employees contribution will never arise. Further, Sec 36(1)(va) talks only about allowance of such expenditure not about disallowance.

Also exact treatment of late payment of employees contribution is treating it as income u/s 2(24)(x) by writing it off from the group current liablility.

Regards,

ChiraG Kalra

Arti Sehgal (MBA) (27 Points)
Replied 07 April 2014

CPFC Notification - Employer PF contribution under section 6 is payable only on basic wages (which excludes HRA, Overtime Allowance, Bonus, Commission etc.), dearness allowance (which includes cash value of any food concession) and retaining allowance, if any.

Regards,

Arti