Provident Fund

[krishna besta]

 If provident fund was not paid with in the due date ie 15th of subsequent month. What are the consequences accoriding to PF act & Income Tax Act ?

If the PF amount paid after the due date is this allowable Expenditure of Employer Contribution for Companies.

[ajay singh]

Apex Court in the case of CIT v. Alom Extrusions Ltd. (2009 (11) TMI 27 - SUPREME COURT) where it has been held that if the employers contribute the ESI and EPF even when made after the due date under the aforesaid Acts but before filing of the return, section 43B is attracted and the said contribution is liable to be deducted as expenditure

[Vivek Harsh]

 Plain reading of Sec 43B makes it clear that if Employer contribution is paid on or before the due date of filing of retun under 139(1) the same shall be allowed in the year in which expenditure is incurred.

 Very recently Supreme Court in case of Vinay Cement(2007 (3) TMI 346 - Supreme Court of India) for Employees Contribution held, the same shall all be allowed if  paid on or before the due date of filing of retun under 139(1) the same shall be allowed in the year in which expenditure is incurred.

AI Summary

Tax deduction under Section 43B: employer provident fund contributions allowed if paid by the return filing due date. An employer's contribution to provident or social security funds is deductible for income tax purposes if paid on or before the due date for filing the income tax return; contributions paid after the statutory installment due date but before the return filing due date are allowable business expenditure. Supreme Court authority confirms that employer and employee contributions discharged by the return filing due date meet the timing requirement and are deductible in the year the expenditure is incurred.