Confused About PF Contribution Period for Audit? Need Clarification on March Contributions

Clarification on PF Contribution Period for Audit

As we know, the contribution period for PF is March-February. For example, if the financial year is 2011-2012, then the contribution period for FY 2011-2012 would be March 2011-February 2012. To clarify, for a tax audit, the auditor would need details for the contribution period, which is March 2011-February 2012, for the assessment year 2012-2013. As an HR professional, I have provided the challan copies for that period to the auditors. However, they are now requesting the challan copy for March 2012 for auditing purposes. They believe that the contribution made in March 2012 should also be considered part of FY 2011-2012 for the audit.

Contrary to their belief, my understanding is that the contribution for March 2012 should be considered in FY 2012-2013, with its assessment year being 2013-2014.

I would appreciate your valuable thoughts on this matter. If I am mistaken, please provide me with the necessary information.

Regards,
Shweta Singh

You are correct. There will not be any assessment for March 2012, as the period for that would fall under the FY 2012-13. The remitted copies will then be assessed.

Your submission is correct on the matter of the PF contributing year, which runs from March to February. Please also note that we are handling compliance for that contributing period from April to March. This is why tax auditors always ask to see the challan from April to March.

Thank you.

Probably the auditor needs the contributions made during the financial year - April to March, but not February-March, as Mr. Lohar pointed out, and hence the confusion.

Regards,
B. Saikumar
HR & Labour Law Advisor
Mumbai

Clarification on PF Contribution Period

This discussion is too confusing. Please clarify what Shweta Singh wants to know. For the PF contribution period, it is from April to March. So, we consider the amount paid for March compared to the amount paid for February. Is this the correct procedure? Auditors also check the challans for these remittances only. Please correct me if I am wrong!

Regards

Clarification on Showing Auditors the Challan and Payment

Is there anything wrong with showing the auditors the challan and payment for the next month? If you have paid properly and on time, why make an issue of it?

Further, are these PF auditors, internal auditors, or statutory auditors of your company?

Regards,

I am not making any issue of it. Every payment has been made on time. I am not against giving any required documents to auditors because, at the end of the day, whatever they are doing would be beneficial for my company only. However, since for the annual audit, we take the data of the last financial year, the data for statutory deductions like PF should be for the FY (2011-2012) as the contribution period of PF is March to February. As I already mentioned in my post, since they were asking for the March '12 contribution and as it is not taken in the FY (2011-2012) for PF, I had doubts and hence raised the question for the same.

For your information, this prestigious site is for this purpose only and has been solving queries on different topics. Not only this, but somebody else might have had the same doubt as I did, so a question asked by me might have helped many others in solving their queries.

Hence, being a member of this great site, you should not have posted such a comment.

Regards,
Shweta Singh

An understanding of the issue as explained below may remove the doubts. While the P.F. contribution year is March to February, the financial year is April to March. You must be deducting the P.F. contribution of the previous month from that month's wages paid in the succeeding month. Hence, the confusion. However, since the audit is for the financial year April to March (not March to February) and since you have deducted the P.F. contribution of March from the wages paid in April, they must be asking for the challans of March contribution.

Though the P.F. contribution relates to the March month, for audit purposes, the remittance relates to April. Moving forward, this month's wage, the 12th remittance for the audit, must have been in March but relates to the February month. Thus, the contribution period and the financial period correspond to each other.

Regards,
B. Saikumar
HR & Labour Law Advisor
Mumbai

You are correct on your side; your annual return is from March 11 to Feb 12. However, the auditor is going through the financial calendar, i.e., April 11 to March 12. Therefore, they are asking for March challan details. If you have deposited the contribution, provide them with the same.

Regards,
C.M. Mohla