07 September 2009
One of my Group Company likely to form a Employee Welfare Fund (EWF) for the benefit of the employees.Company will deduct few percentage of salary from all the employees after the declaration and Company also contribute large amount of funds to the EWF. Now question is whether that amount is allowed as deduction under the Income Tax Act or not, if yes, under which section
07 September 2009
A) Employees contribution (Deductible u/s36(1)(va): The provision is stated below:
Section 36(1)(va): any sum received from any of the employees towards their contribution to the welfare fund accounts, if such sum is remitted on or before the relevant due date to the concerned fund account. The due date means the date by which the assessee is required as an employer to credit an employees contribution to the employees account in the relevant fund under any Act, rule, order or notification issued thereunder or under any standing order, award, contract of service or otherwise.
B) Employers contribution (Deductible u/s 36(1)(iv) or (v): The provision is stated below:
Section 36(1)(iv): Contribution to recognised providend fund or approved superannuation fund (Subject to sec. 43B)
Section 36(1)(v): Contribution to an approved gratuity fund (Subject to sec.43B)
C) Employers contribution (Not-Deductible u/s 40A(9): The provision is stated below:
Section 40A(9): Any contribution made by the assessee to unrecognised or non-statutory welfare fund accounts is not deductible.
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