Treatment of pf contribution


BHUPENDER (ca)     16 April 2012

BHUPENDER
ca 
 66 points

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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

avater

DIBYENDU (SERVICE)     16 April 2012

DIBYENDU
SERVICE 
 23 likes  266 points

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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

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RIZWAN AKHTAR (ACCOUNTS EXECUTIVE)     16 April 2012

RIZWAN AKHTAR
ACCOUNTS EXECUTIVE 
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Agree with Dibyendu.

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C.A. M.Com. Suhas A. Nagpure (CA)     16 April 2012

C.A. M.Com. Suhas A. Nagpure
CA 
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Please note-

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

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Ritesh Jain (CA, CS in Job)     16 April 2012

Ritesh Jain
CA CS in Job 
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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....

 


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