Dear All,
PF contribution by employer and employee.
Can an employee get tax exemption on total PF contribution (by employer and employee).
Suppose
Basic salary : Rs.10,000/-
PF by employee : Rs.1,200/-
PF by employer : Rs.1,200/-
Which amount an employee can claim in tax deduction.
Please help.
Employe'sr contribution towards PF is exempt from tax and employee's contribution is eligible for deduction u/s80C to the extent of 12% of salary depending up on type of PF(i.e.,SPF or PPF).
Dear Soumya,
However you didn’t clarified that what scheme you have opted for provident fund I would like to give you extensive information in regard to different Provident Fund Schemes.
There are basically three kinds of schemes available for employees which are:
Following table is summary showing tax treatment of provident Fund:
| Fund | Employee's Contribution | Employer's Contribution | Interest on PF |
| RPF | Deduction u/s 80c available |
Exempted up to 12% of salary(Exceeding 12% shall be added to salary hence taxable) |
Exempted upto 9.5%(Exceeding 9.5% shall be added to salary hence taxable) |
| URPF | No Deduction available | Any amount of contribution Not Taxable | Not Taxable |
| SPF | Deduction available u/s 80C | Fully Exempted | Fully Exempted |
In your case it can be assumed that you have opted for RPF. Therefore employer’s contribution of 1200 which is not more than 12% of Basic salary will be exempted. Employee can claim deduction of 1200 of employee’s contribution u/s 80C.
Thanks and Regards
Shreesh Kumar
DEAR SOUMYA G,
IN INCOME TAX EXEMPTION AND DEDUCTION IS TWO DIFFRENCE CONCEPT.
IF YOU WANT TO TAKE EXEMPTION BENIFT OF PF WHICH IS YOU WITHDRAWAL FROM YOU PF A/C ,
THAN YOU CAN TAKE BENIFIT U/S 10(11),10(12)
AND IF YOU WANT TO TAKE DEDUCTION BENIFIT AGAINST YOU TAXABLE INCOME THAN YOU CAN DEDUCTION YOUR WHOLE AMOUNT ONLY CONTRIBUTE BY YOU ( NOT YOUR EMPLOYEER) U/S 80C
BUT YOUR PAN CARD SHOUL BE INDIVIDUAL OR HUF
GOOD LUCK
CAclubindia
