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It is set up by Company itselfi.e. Company opens a private fund and deposit both employee andempoyersshare.

However, this fundisnot recognizedby Commissioner of Income tax



Employer’s contribution

It is not taxable in the year Contribution is made,

It istaxable in the year amount is received by the employee from fund



Employee’s contribution

:-No deduction available under 80 C as it is not a recognized fund





Interest on PF is taxable in the year of receipt as Income from Other Sources

This interest has 2 Components

Interest on PF on Employee’s Contribution

It is taxable as Income from Other Sources

Intereston PF onEmployer’s Contribution

 Taxes as profit in lieu of salary  (income from salaries)



  1. Income Tax
  2. Income from Salaries
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CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 6 years. He provides courses for Practical Accounts, Taxation and Efiling at teachoo.com.