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PF/ESIC Employee contirbution

hitesh (student) (41 Points)

24 October 2010

Whether PF/ESIC emplyee contribution deposited by employer after the due dates under the respective acts,should be allowed as deduction or it should be added to the income of employer?

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Rathna Kumar Kasirajan (DM - Finance) (29 Points)
Replied 24 October 2010

Employees contribution of PF should be deposited within the 20th (after grace period) of the succeeding month and ESI should be deposited within 21st of the succeeding month.

Even if there is a single day delay in depositing the same, the employess contribution is treated as part of employers income as per sec 2(24)x of the Income Tax act.

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hitesh (student) (41 Points)
Replied 25 October 2010

I totally agree with rathna say's,but recently some one told me that there is a supreme court judgement stating that even if employee contribution is paid after due date,then to it can be claimed as an deduction.But i am not sure about this,so if anyone knows about it,then pls reply.

Rathna Kumar Kasirajan (DM - Finance) (29 Points)
Replied 26 October 2010

Hitesh, i think u are refering to the CIT vs. AIMIL Limited case where the Delhi High Court held that if employees contribution towards PF/ESI is allowable even if it is deposited by the employer after the due date but before the date of filing returns. However it is to be noted that the judgement is only from a hign court and is not binding on the IT department outside Delhi.

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