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provision of depositing employee contribution after respective due date but before income tax return due date stands withdrawn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:
| Month | ESIC Employees | ESIC Employer | Total Amt | Due Date | Paid Date |
|---|---|---|---|---|---|
| April | 72 | 304 | 376 | 15.05.2021 | 14.05.2021 |
| May | 322 | 1390 | 1712 | 15.06.2021 | 07.07.2021 |
| June | 320 | 1379 | 1699 | 15.07.2021 | 07.07.2021 |
| July | 346 | 1491 | 1837 | 15.08.2021 | 14.08.2021 |
| August | 410 | 1768 | 2178 | 15.09.2021 | 14.09.2021 |
| September | 405 | 1749 | 2154 | 15.10.2021 | 14.10.2021 |
| October | 355 | 1531 | 1886 | 15.11.2021 | 14.12.2021 |
| November | 387 | 1670 | 2057 | 15.12.2021 | 14.12.2021 |
| December | 360 | 1556 | 1916 | 15.01.2022 | 14.01.2022 |
| January | 332 | 1426 | 1758 | 15.02.2022 | 16.02.2022 |
| February | 337 | 1453 | 1790 | 15.03.2022 | 15.03.2022 |
| March | 360 | 1553 | 1913 | 15.04.2022 | 18.04.2022 |
| Total | 4006 | 17270 | 21276 |
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.
Mar 23, 2022 - Blog - Team SSB
