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How Much take deduction of Employee Provident fund in income tax

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Anoop Jain

66 Points Posted on 13 April 2022

Hello Sir

I am working in college and my salary is Rs. 50000/- monthly.

provident fund of Rs 3600/- per month is deducted in my salary. In which my contribution is 1800 / - per month and the contribution of the owner is 1800 / - also I voluntarily get it deducted from my salary.

So now I want to know that now how much exemption of provident fund will I get in income tax?

1800/- per month i.e. 21600/- will be exempted in income tax or 3600/- per month i.e. 43200/- will be exempted?

Replies (3)

Quick Summary

This discussion clarifies the tax deductibility of Employee Provident Fund (EPF) contributions. It explains that only your personal contribution to the EPF is eligible for tax exemption under Section 80C of the Income Tax Act. The employer's contribution is not deductible but also not taxable as part of your salary. Therefore, if your monthly salary is Rs. 50,000 and Rs. 3,600 is deducted for EPF (Rs. 1,800 your contribution and Rs. 1,800 employer's), you can claim a deduction of Rs. 21,600 annually.

CA Aakarsh Jain

4330 Points Posted on 13 April 2022

You can claim deduction of employee share in 80c only. employer share is not allowed as deduction and also it will not become part of your income under the head salary.