Late payment of employees provident fund

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

21 July 2013
We have deducted EPF for Feb 13 and payment made in July 13, can we allow the expenses at time of computation of income tax for 2012-13.

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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21 July 2013 If the EPF not paid with in due date will be disallowed u/s.43B

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Querist : Anonymous

Querist : Anonymous (Querist)

21 July 2013 Late payment of employees’ conmtribution is an allowable expense u/s 43B in view of SC judgement in case of v Vinay Cement Ltd (213 CTR 268) and followed in case of CIT Vs Aimil Ltd [2010-TIOL-125-HC-Del-IT]. Pl refer to Tax Guru article on the issue dtd. 20-03-2010.

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Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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02 August 2024 Under Section 43B of the Income Tax Act, late payment of Employees' Provident Fund (EPF) contributions is addressed. Here's how it applies to your situation:

### **1. Section 43B Overview**

Section 43B of the Income Tax Act allows for the deduction of certain expenses only if they are actually paid within the specified due date under the respective laws. This includes:

- **Employee's Contribution to Provident Fund**: Deductions for employees' contributions to provident fund are allowable under Section 43B only if the payment is made before the due date of filing the income tax return for the relevant financial year.

### **2. Supreme Court and High Court Judgements**

- **Vinay Cement Ltd Case (213 CTR 268)**: The Supreme Court ruled that payments made after the due date of filing the income tax return are disallowed under Section 43B. However, if the payment is made before the due date for filing the return for the relevant assessment year, it is allowable.

- **Aimil Ltd Case (2010-TIOL-125-HC-Del-IT)**: The Delhi High Court held that if the contributions are paid within the due date for filing the return under Section 139(1), they are allowable as a deduction.

### **3. Application to Your Case**

In your case, the EPF contributions for February 2013 were paid in July 2013. Here's how it impacts your income tax computation:

- **For FY 2012-13**: The due date for payment of EPF contributions is the due date for filing the income tax return for FY 2012-13. This would typically be on or before 30th September 2013 (if filed within the due date).

- **Payment Date vs. Due Date**: Since the payment was made in July 2013, it is within the permissible period to claim the deduction for the FY 2012-13.

### **4. Deductibility of Expenses**

- **Claim in FY 2012-13**: You can claim the deduction for EPF contributions in FY 2012-13 because the payment was made before the due date for filing the income tax return for that year.

### **5. Summary**

- **Allowable Deduction**: Yes, you can allow the EPF expenses for FY 2012-13 as long as the payment was made before the due date of filing the return (which is 30th September 2013 for FY 2012-13).

- **No Impact**: The late payment will not affect the deductibility of the expense for the financial year if paid before the return filing due date.

In conclusion, based on the Supreme Court and High Court judgments, as well as the stipulations under Section 43B, you can claim the EPF contribution as an expense in the financial year 2012-13 since the payment was made before the due date for filing the income tax return.