EPF with PPF clarification for salaried person

Income Tax Income from Salary
1

Suppose a non-government salaried person has an EPF account.

Employee Contribution EPF amount 4500 Rs and Employer Contribution EPF amount 4500 Rs

What will be the 80C and 80CCC deduction benefit calculations from PF?

  1. Is it 4500 X 12 = 54,000 (when the employee has no additional PPF)?
  2. Or is it a calculation like below?
    4500 [Employee Contribution] + 4500 [Employer Contribution] = 9000
    9000 X 12 = 1,08,000

As 80C, the 80CCC Maximum Deduction is 150,000.00.
So for the above example, if the same employee wants to get a full Rs 150,000.00 deduction benefit, then how much does he need to invest in PPF in the above scenario?

2

Hello @subhajit_panja,

The deduction under 80C is available only for employees’ contributions to PF. Hence in your case, it will be 4500*12= 54000

Under section 80CCC an individual who has invested in the pension funds of LIC can claim deduction.

Total deduction available is INR 1.5 Lakhs. So in this case you can invest additional 96000 in PPF or other eligible options to claim full deduction.

Read more about eligible options for 80C investment here: Section 80C: Deduction for Tax Saving Investments - Learn by Quicko

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