Employer's contribution to PPF

Fazil Ahmad (Article Assistant) (80 Points)

27 October 2011

Is employer's contribution to Public/Statutory Provident Fund taxable in the hands of employee? And can any1 tell me the list of non monetary perquisites!

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U S Sharma (glidor@gmail.com) (21051 Points)
Replied 27 October 2011

Originally posted by : Fazil Ahmad
	Is employer's contribution to Public/Statutory Provident Fund taxable in the hands of employee? And can any1 tell me the list of non monetary perquisites!

after completion of 5 complete years of contribution to PF, amount is exempted,

premature withdrawls before completion of five years is taxable in the year of withdrawl.

1 Like

Rahul Suneja (CA-Final, CS-Exec) (215 Points)
Replied 27 October 2011

employeer contribution to epf is exempt from tax in hands of employee but only to a maximum limit of 12%per month .Over and above 12% is taxable

Kunal (Risk Analyst) (299 Points)
Replied 27 October 2011

12% kiska dekhte hai...is it basic salary or salary including DA,bonus,commission etc

Mugundan (Live your Passion) (249 Points)
Replied 27 October 2011

Hi Fazil.,

Employer does not contribuite to Public Provident Fund for the Employees

Employer's Contribution to Statutory Provident Fund is Exempt from Tax u/s 10(12) for the Employees.

1 Like

Mugundan (Live your Passion) (249 Points)
Replied 27 October 2011

Hi Roopak...

12 % should be calculated on

( Basic Salary + D.A.(Forming part of Salary) + Commission on Turn Over )

Nabeel (CA) (3288 Points)
Replied 27 October 2011

Employer contribution to EPF is exempted upto 12% of salary where salary means Basic salary + DA + Commission on fixedpercntage of turnover........

CA PRAVEEN SINGH (MANAGER ACCOUNTS) (2277 Points)
Replied 27 October 2011

As per amendment-dated 22.9.1997 in the Act, both the employees and employer contribute to the fund at the rate of 12% of the basic wages, dearness allowance and retaining allowance, if any, payable to employees per month. The rate of contribution is 10% in the case of following establishments:

Any covered establishment with less then 20 employees, for establishments cover prior to 22.9.97.
Any sick industrial company as defined in clause (O) of Sub-Section (1) of Section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985 and which has been declared as such by the Board for Industrial and Financial Reconstruction,
Any establishment which has at the end of any financial year accumulated losses equal to or exceeding its entire net worth and
Any establishment engaged in manufacturing of (a) jute (b) Breed (d) coir and (e) Guar gum Industries/ Factories. The contribution under the Employees' Provident Fund Scheme by the employee and employer will be as under with effect from 22.9.1997.

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JR Kumar (faculty director) (27 Points)
Replied 28 October 2011

It is not obligatory on the part of employer to contribute to the PPF account opened by an employee.Hence any contribution by the employer to such PPF account of employee will be treated as a part of salary and will be included in the taxable income of the employee

.However amount deposited in the PPF account of the employee will beome eligible for the standard tax exemption available for savings subject to limit as prescribed in IT Act for the concerned year.

JR Kumar,

Faculty Director,

FAPCCI,Hyd

Mobile 98859 21599

2 Like

capandureddy (Chartered Accountant) (44 Points)
Replied 28 October 2011

PPF account can be opened by any person and standard assumption what ever amout get deposit in PPF account was that it has been deposited by the account holder

Since here your employer has deposited the amout in your PPF account what ever amount get deposited first it is treated at par as salary and benefit you get here is you are eligible to that amount under Section 80c for claiming chapter via deductions

But generally employor has to contribute to PF not to PPF

3 Like