budget 2021 has proposed to disallow deduction of employees pf contribution as an expense to employers if they do not deposit it in time this is expected to put pressure on employers to deposit the employees provident fund contributions on time to the extent that this ensures employers do not misuse or divert money meant for employees provident fund it will help increase surety of getting their pf money from the employers further this will also ensure that there is no loss of interest for the employees on such contributionsas per the budget speech we have noticed that some employers deduct the contribution of employees towards provident funds superannuation funds and other social security funds but do not deposit these contributions within the specified time for the employees this means a loss of interest or income in cases where an employer later becomes financially unviable nondeposit results in a permanent loss for the employees in order to ensure that employees contributions are deposited on time i reiterate that the late deposit of employees contribution by the employer will not be allowed as deduction to the employeras per the explanatory memorandum of the budget 2021 such changes will come into effect from april 1 2021 and will apply to the companiesemployers filing itr for fy 202021shalini jain tax partner people advisory services ey india says this new provision will provide more security to employees with respect to their own contributions it will ensure that payment of social security dues become one of the top most priority for companies in view of consequential loss of corporate tax deduction if the employees contributions are not paid within the prescribed timelines how interest is calculated on epf depositsyou might also likeif bank fails rs 5 lakh deposit insurance amount to be available immediately to depositorsunder the epf scheme for the month of april 2020 the employer has to deposit epf contributions by may 15 2020 once the money has been deposited into the account by the employer the interest accrual on the said contribution will start from june 1 2020do keep in mind that the rules for delay in epf contribution by the employer and nondeposit of contribution are different even if an employer makes a delayed deposit of epf contribution for april 2020 the employee will still receive interest from june 1 2020 whereas if the employer defaults in deposit of epf contributions due to financial or other issues and does not make a deposit at all then as there is no credit in employees account for the said period there will be no interest on contributions due for the said period however on accumulated balance it will continueyou might also likeno itr filing for senior citizens aged 75 years and above earning only pension interestno changes in income tax slabs rates deductions exemptions in budget 2021additional tax deduction of rs 15 lakh for interest on home loan for affordable housing extended