Is Your Company Liable for Income Tax on Late PF & ESI Payments? Let's Discuss!

Dear Sir,

If PF & ESI payments are delayed beyond the due date, is the company accountable or liable to pay income tax on the actual delayed payments for PF & ESI? Will it not be considered as an expenditure for computation?

Thanks & Regards,
Sameer Deshmukh

Greetings,

The delayed payment of PF and ESI contributions will incur penalties and interest, which, of course, are considered business expenditures and are permitted when computing corporate taxes. However, for the period it remains with the company, it would be challenging to assume that it earned some "notional" income/return, and therefore, it is not taxable.

For any further clarification, please contact us at 9822394170 or via email at abhirutu@rediffmail.com.

Regards and wishing everyone a HAPPY X'MAS AND NEW YEAR.