CA, CS Pawan Sehrawat
If employers deposits employee’s Provident fund contribution before due date as referred to in section 43B, employer is eligible for benefit under said section-High Court-Karnataka.
Before sharing courts judgement, let’s go through the income tax provisions.
Business income includes (as per section 2(24)(x)) any sum received by the assessee from his employees as contributions to any provident fund or superannuation fund or any fund set up under the provisions of the Employees’ State Insurance Act, 1948 (34 of 1948), or any other fund for the welfare of such employees.
Deduction on above is allowed (u/s 36(1) (va)) if same is credited by the assessee to the employee’s account in the relevant fund or funds on or before the due date (as given in said fund Act).
As per section 43B any sum payable by the assessee as an employer by way of contribution to any provident fund shall be allowed (irrespective of the previous year in which the liability to pay such sum was incurred by the assessee according to the method of accounting regularly employed by him) only in computing the income referred to in section 28 of that previous year in which such sum is actually paid by him, except where said contribution is paid by assessee on or before the due date of return of income in respect of the previous year in which the liability to pay such sum was incurred.
