Employer Contribution Taxability

Employer’s contribution to EPF, NPS, and Superannuation Fund is tax-free only up to a combined limit of ₹7.5 lakh per financial year.
Any amount contributed beyond ₹7.5 lakh becomes taxable as a perquisite for the employee.

Additionally, for EPF:

• Employer’s contribution is exempt only up to 12% of salary (Basic + DA)

• Any contribution exceeding 12% of salary is taxable

 Example

Salary (Basic + DA): ₹15,00,000
12% of Salary: ₹1,80,000
Employer’s EPF Contribution: ₹2,00,000

➡ Taxable excess = ₹2,00,000 − ₹1,80,000 = ₹20,000

(Also ensure that total employer contribution to EPF + NPS + Superannuation Fund does not exceed ₹7.5 lakh; otherwise, the excess is additionally taxable.)