provident fund

This query is : Resolved

Navita (Querist)
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22 November 2007 according to sec 36 of PGBP of income tax act we cannot get deduction of employees contribution of provident fund from business income if we do not deposit it within due date or grace period of 5 days.
IS IT TRUE?

girish

girish (Expert)
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22 November 2007 As the contribution of employees has not been made before due date it is treated as an income of employer Therefore the same has to be taxed.
Thus, it is Disallowed.

K V Subba Rao

K V Subba Rao (Expert)
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22 November 2007 Your Observation is correct. Pl. refer Example at Para 49.6.E1 in Page A-113 of 30th edition of the Singhania' Direct Taxes Ready Reckoner

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CA. Vineet Grover

CA. Vineet Grover (Expert)
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23 November 2007 hi Navita,

The said issue is covered u/s 43B wherein it is mentioned that any sum payable by an employer by way of contributionto PF or supperannuation fund or any other fund for the welfare of the employees are deductible on payment basis. The above expenses are deductible in the year in which payment is actually made.

Rgds/
Vineet

Prakash

Prakash (Expert)
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23 November 2007 Employee's contribution is covered u/s 36 : it has to paid with in the time limit or within grace days.
however empoloyer's contribution is covered by section 43B