March 6, 2014



From- Tarun

Regarding Income tax on Employers contribution in EPF

My contribution to EPF is 12% of my Basic+DA and same amount of Employers contribution

My employers gives me Form 16 in this form he included Employers contribution in Gross salary under the head of Salary as per Provisions contained in sec. 17(1), because of this my income is more than my payslips amount and I have to pay more income tax.

As I know that employers contribution in EPF is not taxable upto 12% of Basic+DA, and should not include in gross salary,

when I talked to him, he said that it is your CTC,

So please tell me what should i do


Hi Tarun,

Thanks for posting your query, please get your answer below:

1. Yes you are right that Employers contribution to Recognized Provident Fund is exempt upto 12 % of Salary. Salary for this means Basic + DA + Commission on Fixed Percentage of Turnover.

2. Please show the relevant Income Tax Section to your Accounts/Finance Department and ask them to amend the TDS certificate.

3. If the Employer does not amend the certificate, then also there is no problem as Form 16 is not a supplement of your income tax return. File your return correctly by taking exemption for Employers contribution and you can claim the refund from the department.

Hope this helps you, feel free to contact further for any queries.

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