Share of Employee Contribution disallowed | Income Tax Amendment

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    The share of Contribution of Employee in Employee’s State Insurance Corporation (ESI), Provident Fund (PF) or Superannuation Fund or any other fund for the welfare of Employee after due date as per the Respective act shall be DISALLOWED while computing Income Tax. Even if the share has been paid after the due date, the same shall remain disallowed.

    To summarize the Amendment, it will be important for every Employer Assessee to Deposit the share of Employee contribution in given funds BEFORE the respective due date so as to avoid DISALLOWANCE in Income Tax Act.

    The earlier provision of depositing employee contribution after respective due date but before income tax return due date stands withdrawn

     For Example:

    MonthESIC EmployeesESIC EmployerTotal AmtDue DatePaid Date
    April7230437615.05.202114.05.2021
    May3221390171215.06.202107.07.2021
    June3201379169915.07.202107.07.2021
    July3461491183715.08.202114.08.2021
    August4101768217815.09.202114.09.2021
    September4051749215415.10.202114.10.2021
    October3551531188615.11.202114.12.2021
    November3871670205715.12.202114.12.2021
    December3601556191615.01.202214.01.2022
    January3321426175815.02.202216.02.2022
    February3371453179015.03.202215.03.2022
    March3601553191315.04.202218.04.2022
    Total40061727021276

    In the given case, Employee share of deposit of the month October, January and March totalling to Rs.  1,047/- (Rs. 355+ 332+360) shall be disallowed while computing income even though it has been paid within Due date of filing of Return. The same shall never be permissible as cost.

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    Mar 23, 2022 - Blog - Team SSB



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