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| *Ostroff, Fair and Company>>>India Taxes |
About the voulantary contribution by the employer in employee provident fund & its tax implication? |
if the employer covered under PF act wants to contribute voluntary for the employee whose salary is more than 6500 than whats the procedure for that ,whether such voulantary contribution is deductable exp. under the IT act & if so is there is any limit under IT act for such deduction & whether such voulantary contribution is taxable as fringe benefit tax. 1) Voluntary contribution (or for that matter any contribution) is deductible upto 12% of the salary. 2) Yes voluntary contribution (any contribution over and above the statutory obligation) is chargeable to FBT. Source(s): IT Act I guess they will have to open EPF accounts for its employees with EPF trust. I'm not sure about tax deductions. Maximum 100% of basic can be deducted for PF. These are not taxable under FBT For PF 12% of the basic pay is the maximum that is allowed under the IT act, any contribution over and above that is taxable. PF contribution does not fall under FBT The procedure would be to open a PF account for each employee for whom you wish to contribute. The contribution can be any amount but the maximum allowable expense is 12% of basic salary. As far as FBT provisions go, there is a lot of ambiguity and my point of view is that PF contribution will NOT be covered under FBT. |
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