Treatment of arrears pension fund contribution by employer

Vinod (Querist) 27 November 2014 This query is : Resolved
Sir,
I am working in PSU. In 2013-14 FY my company revised the Pension scheme w.e.f 2007. And started Employer contribution @ 15% of basic.
w.e.f 2007. The company contributed this as arrears contribution in 2013-14 FY for 2007,2008 so on. And it taxed at the Hand of Employee during AY2014-15. BUt i heard that up to Rs.1 Lakh contribution by employer towards approved Pension fund is exempted. So can I Claim this deducted tax by filing a revised return now.Please clarify with relevant provisions.

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ROHIT SHARMA (Expert) 27 November 2014
1. Yes, you can claim this deducted tax by filing a revised return now. However do consult a chartered accountant firm.

ajay sethi (Expert) 27 November 2014
you can raise query in CA club india .com

Anirudh (Expert) 27 November 2014
I hope the pension scheme has been notified by the Central Government.

If that be so, then Section 80CCD of the I.T.Act is relevant.

According to Sec. 80CCD (1), the employee shall be allowed while computing his total income for the purposes of tax, a maximum deduction of ten per cent of his salary in the previous year.

From the A.Y. 2014-15, the maximum amount that will be permitted to be deducted under Sec. 80CCD(1) is 1 lakh rupees. (In other words, as regards the employee's contribution, first 10% has to be worked out. If 10% exceeds Rs. 1 lakhs, then it will be restricted to Rs. 1 lakh).

As regards the employer's contribution, Section 80CCD(2) provides that the assessee (employee) shall be allowed a deduction in the computation of his total income, the whole of the amount contributed by the employer as does not exceed 10% of his salary in the previous year.

Therefore, first you have to know what is your 'salary'. For this you have to refer to the definition which is given in Section 17(1). After knowing what is your salary, then you can calculate how much 10% of that works out. Only when the employer contribution exceeds that 10% amount of your salary, then the same is taxable. Otherwise not.

Therefore, first you have to make calculations and then only act appropriately.