It is a scheme to which the Employee’s Provident Funds and Miscellaneous Provisions
Act, 1952 applies. According to this Act, any establishment, which employs 20 or more persons, is obligated to register under the Act and start a PF scheme for the employees in the organisation. Such scheme has to be approved by the Provident Fund Commissioner as well as the Commissioner of the Income Tax.
Employee’s contribution: rebate u/s 80C is available
Employer’s contribution: exempt up to 12% of salary, excess of 12% to be included in gross salary.
Interest on PF: exempt u/s 10 up to 9.5% p.a Interest credited in excess of 9.5% to be included in gross salary.
The benefit of employers contibution is taken by the employer while declaring his expense and in no way included in the gross salary of the employee. The taxability of PF can only be considered in case of withdrawal from the fund, other wise in cases whatever the amount contibuted by the employer 12 % or more is not at all taxable to the employee.
Thanks & Regards
Found This Useful? +Vote Up This Page Via Google.
Why Vote? User validation is extremely important for good content to prosper.
Disclaimer: This network and the advice provided in good faith by our members only facilitates as a direction towards the actions necessary. The advice should be validated by proper consultation with a certified professional. The network or the members providing advice cannot be held liable for any consequences, under any circumstances.
Explore Topical Knowledge Areas
Topic Categories >> income tax Location-India-Pune provident funds urgent need Complete List Of Categories
Interesting Relevant Discussions