Dear Sirs,
Request your help on Super Annuation Scheme. I have collected much information on various schemes but still I need clarification on the following -
1) Is there any statutory requirement for eligibility in the Scheme? e.g. Is it compulsory for an employee to be in service for minimum 5 years to avail benefit of SA scheme when he leaves the company? or this would depend upon the company providing SA scheme?
2) What is the tax benefit to Employee? If the contributions are made by the Employer - it would NOT be considered at Income in the hands of an employee up to the limit of Rs. 100,000/- and above this limit it would be taxable. Does this also mean the employee will have contribution up to 1 lac as tax free above 1.00 Lac limit u/s 80C?
Thanks & Regards,
Kedar Pradhan
From United States, Wickliffe
Request your help on Super Annuation Scheme. I have collected much information on various schemes but still I need clarification on the following -
1) Is there any statutory requirement for eligibility in the Scheme? e.g. Is it compulsory for an employee to be in service for minimum 5 years to avail benefit of SA scheme when he leaves the company? or this would depend upon the company providing SA scheme?
2) What is the tax benefit to Employee? If the contributions are made by the Employer - it would NOT be considered at Income in the hands of an employee up to the limit of Rs. 100,000/- and above this limit it would be taxable. Does this also mean the employee will have contribution up to 1 lac as tax free above 1.00 Lac limit u/s 80C?
Thanks & Regards,
Kedar Pradhan
From United States, Wickliffe
Dear Sir,
Superannuation is not a legal requirement. The Companies opt for it to use it as a retention tool.
There is no statutory requirement or any prescribed eligibility in any law. It is generally governed by the trust deed and rules in each company. Normally, the eligibility is 5 years continuous service. The employees get the benefit of pension on retirement and they can get a part of the accumulation commuted also. This is at the time of retirement and / or leaving the Company after putting in a prescribed minimum service.
Further, there is no limit. The limit of Rs. 1 lac had come in the case of levy of Fringe Benefit Tax (FBT) which has now been withdrawn.
Now, any contribution made by the employer is tax free and there is no limit.
Further, the employee does not get any benefit of the contribution so made u/s 80C of the Income Tax Act.
Hope this would help you.
Thanks & Regards,
Avika Kapoor
Assistant General Manager - Business Development
Website: Kapgrow
From India, New Delhi
117Superannuation is not a legal requirement. The Companies opt for it to use it as a retention tool.
There is no statutory requirement or any prescribed eligibility in any law. It is generally governed by the trust deed and rules in each company. Normally, the eligibility is 5 years continuous service. The employees get the benefit of pension on retirement and they can get a part of the accumulation commuted also. This is at the time of retirement and / or leaving the Company after putting in a prescribed minimum service.
Further, there is no limit. The limit of Rs. 1 lac had come in the case of levy of Fringe Benefit Tax (FBT) which has now been withdrawn.
Now, any contribution made by the employer is tax free and there is no limit.
Further, the employee does not get any benefit of the contribution so made u/s 80C of the Income Tax Act.
Hope this would help you.
Thanks & Regards,
Avika Kapoor
Assistant General Manager - Business Development
Website: Kapgrow
From India, New Delhi
Dear Sir,
Thanks very much! About Employer taxation - I did refer to Direct Taxes Ready Recknor By Dr. Vinod K. Singhania. asst. years 2010-11 and 2011-12. It's said in the book that contribution above 1.00 Lacs by employer is taxable in the hands of employee. Also as per my understanding - contributions up to 27% (PF, SA etc) are tax exempt for an employer.
Request you to clarify the above.
Thanks & Regards,
Kedar Pradhan
From United States, Wickliffe
Thanks very much! About Employer taxation - I did refer to Direct Taxes Ready Recknor By Dr. Vinod K. Singhania. asst. years 2010-11 and 2011-12. It's said in the book that contribution above 1.00 Lacs by employer is taxable in the hands of employee. Also as per my understanding - contributions up to 27% (PF, SA etc) are tax exempt for an employer.
Request you to clarify the above.
Thanks & Regards,
Kedar Pradhan
From United States, Wickliffe
Dear Sir,
The amount was taxable only in case of FBT.
In any case, Rs. 1 lac was for each employee and not all the employees put together.
Yes, contribution of 12% for PF and 15% for superannuation (total 27% is exempt).
Hope this would help you.
Thanks & Regards,
Avika Kapoor
Assistant General Manager - Business Development
Website: Kapgrow
From India, New Delhi
The amount was taxable only in case of FBT.
In any case, Rs. 1 lac was for each employee and not all the employees put together.
Yes, contribution of 12% for PF and 15% for superannuation (total 27% is exempt).
Hope this would help you.
Thanks & Regards,
Avika Kapoor
Assistant General Manager - Business Development
Website: Kapgrow
From India, New Delhi
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