Is Your Employer's PF Contribution Taxable? Seeking Quick Clarification

Dear All,

I am in urgent need of clarification regarding a query. My query is whether the employer's contribution to PF is taxable to the employee (as it is also a kind of income to the employee).

Please clarify.

Looking forward to your replies as soon as possible.

Thanks,
ANA

Recognised PF:
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.
Taxability:
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.

Dear,

The benefit of employer's contribution is taken by the employer while declaring his expenses and in no way included in the gross salary of the employee. The taxability of PF can only be considered in the case of withdrawal from the fund; otherwise, in cases where whatever amount is contributed by the employer, 12% or more is not taxable to the employee.

Thanks & Regards,

Amal Shere

Employer contribution is not included according to the Income Tax Act of 2001. The taxability of PF can only be considered in the case of withdrawal from the fund; otherwise, any amount contributed by the employer is not taxable to the employee.

Taxability:

- Employee’s contribution: Rebate under section 80C is available.
- Employer’s contribution: 1/3 of the salary.
- Interest on PF: 16% of the interest rate.

Regards

Employer contribution towards a recognized pension scheme does not come under the gross income of the employee and hence is not taxable.