Taxation of Employers contribution to Pension Fund Tushar Gupta, 10 Jul 2013

Sir, My question is about the employer's contribution to the employee's provident fund. 1. In case of Recognized Provident Fund, if employer’s contributes upto 12% of basic salary, will it be tax-free for the employee? 2. If yes, how it will be shown in from 16. 3. Can NPS (New Pension Scheme) be considered under Recognized Provident Fund. Thanking you,

Fintotal Answer

Yes, employer's contribution up to 12% of basic salary has tax exemption. In form 16 this amount will be part of your gross salary and will be put in the item 'allowances exempt u/s 10'. No, NPS is a pension scheme and different from PF. Recognised Provident Funds are PFs that are approved by the Tax Commissioner.

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