Is the share paid by employer towards Provident fund be included in Employee's Salary for the purpose of Tax Calculation.
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RPF Employer Share
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Employer contribution to RPF is exempt upto 12% of salary .In excess of 12% of salary is taxable and will be included while calculating tax.
Here salary means basic+da+fixed percentage commission on turn over if any
If employer’s contribution is upto 12% of salary and interest does not exceed notified rate of interest (At present 9.50% p.a.), it is not taxable.
However, the accumulated balance due and becoming payable to an employee participating in Recognised Provident Fund (RPF) is taxable u/s.17 under the head Income from Salary to the extent of Employers contribution and interest thereon, if i) he does not serve for continuous period of 5 years with the said employer or ii) termination of service is due to reasons beyond his control or iii) in case of employment with other employer, balance in RPF is transferred to RPF account maintained by his other employer.
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