# Section 36 - Employees Welfare Payments
## Sec 36(1)(iv) and 36(1)(v) - Employer's Contribution to Provident & Gratuity Funds
Employer's contributions are allowed to:
- Statutory Provident Fund (SPF)
- Recognized Provident Fund (RPF)
- Approved Gratuity Fund (AGF)
Important: Contributions to Unrecognized PF or Unapproved Gratuity Fund are NOT allowed.
Section 43B applies — actual payment by ITR due date is required.
## Sec 36(1)(iva) - Employer's Contribution to NPS u/s 80CCD
- Deduction allowed up to lower of:
- (i) Actual contribution, OR
- (ii) 14% of Salary (Basic + DA forming part of retirement benefits)
- Excess contribution beyond 14% is disallowed u/s 40A(9).
## Sec 36(1)(va) - EMPLOYEES' Contribution to Welfare Funds
- Amount received by employer from employees as contribution (PF, ESI, superannuation, etc.) is allowed only if paid to the government on or before the due date prescribed under the respective Act (not Income Tax Act due date).
- Clarification by Finance Act 2021: Section 43B does NOT apply here — the due date of the respective Act (e.g., PF Act) is the relevant cutoff.
- If paid after the due date of respective Act:
- Not allowed as deduction permanently, AND
- Added to income (already included as receipt under Sec 2(24)(x))
### Example of Due Date
- PF Act due date = 15th of the next month of receipt.
- Employees' PF contribution for July must be paid by 15th August.
- Paid on or before 15th August → Allowed
- Paid after 15th August → Permanently disallowed and added to income.