Treatment of pf contribution

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BHUPENDER

47 Points Posted on 16 April 2012

Dear freinds ,

Please help me out in the following tax matter

My salary is 30000 exclusive of Provident fund contribution . my joining letter represents my salary as follows 30000+1900 for pf . but when i got my salary it is 30000-1900=28100 that means they have deducted the pf contribution from my salary . Now i want to know that the amount they are showing in my CTC is employee contribution or employer contribution .

also i want to know if it is employee contribution then why they are not giving me the same then deducting it i.e. 30000+1900-19000=30000.

and if it is employer contribution than it is included in my taxable income then whether i can claim deduction under 80 c as (1900+19000)*12 .

Please show the complete calculation for better understanding thanks in advance

Replies (4)

DIBYENDU

SERVICE

283 Points Posted on 16 April 2012

Rs.1900.00 deducted from his Salary is your (employee) contribution towords Provident Fund.

Practically your CTC is 31900.00 (i.e. Rs. 30000+ Rs.1900). So, Employer will give you Rs.28100 (Rs. 31900.00 CTC , Less ; Rs.1900.00 deducted therefrom for Employer Contribution & Rs. 1900.00 for Employee Contribution)

Yes you may claim Rs.3800.00 X 12 manths for deduction U/s 80C

RIZWAN AKHTAR

ACCOUNTS EXECUTIVE

65 Points Posted on 16 April 2012

Agree with Dibyendu.

C.A. M.Com. Suhas A. Nagpure

819 Points Posted on 16 April 2012

Please note-

employer’s contribution is exempt from tax, your contribution (i.e., employee’s contribution) is counted towards section 80C investments.

Ritesh Jain

CA CS in Job

434 Points Posted on 16 April 2012

Employer's contribution is not included in your total income if its upto 12%.

Rs 30000+1900 which company quoted as CTC is as follows :

(Rs 30000 - Rs 1900)---- you will get i.e take home

+ Rs 1900-- which will be deducted as above for your contrn to PF

+ Rs 1900-- in addition to above for employer contribution to PF ( in practical world , employer contribution is not equal to employees bcoz of EPS part involved in employers contribution)

80C is only available for EMPLOYEES contribution....