Employee welfare fund

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

12 December 2012 Dear members,
one of my clients have made an employee welfare fund and contributes 50000 annually to this fund and also deducts the amount from the salary of employees and same is contributed to the fund,please let me know what all tax implications will be there on this fund and will the company get any deduction on contributing to this fund.
thank you.

@VaibhavJ

@VaibhavJ (Expert)
Follow

12 December 2012 Hi

Employers contribution is admissible as employee welfare expenses.

However employees contribution should be voluntarily, co. can not deduct any amount other than that of statutory in nature w/o employees consent.

There is no tax benefit to employee for amount contributed towards this fund.

Thanks//Vaibhav
Revert for more clarity.
Click thank button to convey your appreciation.

Message likes : 1 times

Querist : Anonymous

Querist : Anonymous (Querist)

14 December 2012 hi,
thanks for the answer the employers fund is made by the company on its own and is not registered any where, will the contribution still be allowed? and if not where should it be registered?
please give in detail explanation of the legal steps to be taken in order to take the employee welfare fund contribution as employee welfare expense. and also what will be the tax treatment of the said fund.

Upgrade to CAclubindia Pro. Subscribe Now!

Mohit Naithani

Mohit Naithani (Expert)
Follow

15 December 2012 Employer Cont in any employee Welfare scheme is allow to deduct if its approved and deposite under irrevocable deed.
Here A.O will approve the same and Employer get deduction.

For Employee Cont - Employee should deposit it within time limit prescribe by law. if employee not be eligiale to do the same then it should be added in his total income.