For salaried Indians, is employee's contribution to the Provident Fund exempted from levy? Or is it taxable?

Out of the monthly salary received, some segment is cut as employee's contribution to PF. Is this amount exempted from tax? Or is it included surrounded by the standard deduction? On a related record, is 'anything' included in the standard assumption? Or standard deduction (of 1.1 lakh for males) is minus any conditions?


Answers:    Your salary includes PF amount. From the take-home pay amount you are paying PF.

10,000 is your salary
01,000 is the PF deduct from your salary
---------
09,000 is the web salary you received.

But for excise purpose, the tax will be calculated on Rs.10,000.

The PF will aid you to reduce the rates liability. The PF contribution is a tax positive investment. It falls u/s 80C. The maximum deduction u/s 80C is Rs.1 lakh, which contains LIC premium, NSC, PPF/PF, Kisan Vikas etc.,

Example:
2,10,000 is your remuneration
1,00,000 is your investment in 80C instruments
------------
1,10,000 is the network salary after 80c speculation

That means no due to be paid. (As 1,10,000 is due free income)

http://www.rediff.com/getahead/2005/dec/...
In addition to nominal PF monthly presumption, we can contribute voluntarily excess amount to PF - it is income tax exempted.

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