University · Tax Audit

Form 3CD Clause 20(b) Calculator.

Prepare the employee-contribution table for PF, ESI, LWF and other welfare funds: amount received from employees, due date, actual amount paid, actual date of payment, delay and Section 36(1)(va) disallowance.

3CA / 3CB / 3CD guide

Build the month-wise table

Start with the assessment-year file, keep only the employee share, and change rows where the fund or payment date differs.

Financial year start

Employee contribution

₹3,60,000

Reported paid amount

₹3,60,000

36(1)(va) disallowance

₹1,20,000

Rows to review

Month	Due date	Result
Apr	15 May 2025	Allowable No 36(1)(va) hit
May	15 Jun 2025	Disallow u/s 36(1)(va) ₹1,20,000 disallowed · 33 days late
Jun	15 Jul 2025	Allowable No 36(1)(va) hit
Jul	15 Aug 2025	No amount No 36(1)(va) hit
Aug	15 Sept 2025	No amount No 36(1)(va) hit
Sep	15 Oct 2025	No amount No 36(1)(va) hit
Oct	15 Nov 2025	No amount No 36(1)(va) hit
Nov	15 Dec 2025	No amount No 36(1)(va) hit
Dec	15 Jan 2026	No amount No 36(1)(va) hit
Jan	15 Feb 2026	No amount No 36(1)(va) hit
Feb	15 Mar 2026	No amount No 36(1)(va) hit
Mar	15 Apr 2026	No amount No 36(1)(va) hit

What goes into the actual amount paid column?

Clause 20(b) is about sums received from employees. For PF and ESI, that means the employee contribution deducted from payroll, not the whole challan. If the challan total includes employer share, admin charge or interest, strip those out before filling the clause.

After Checkmate Services, the tax-audit position is strict: employee contribution paid after the due date under the relevant welfare law is disallowed under Section 36(1)(va). The income-tax return due date under Section 139(1) does not rescue the deduction.

Under the Income-tax Act 2025 (tax year 2026-27 onwards)

Employee PF / ESI contribution for FY 2026-27: Section 36(1)(va) becomes Section 29(1)(e), first reported in the 2027 tax audit season; the rule treating employee contributions as the employer’s income (old Section 2(24)(x)) is Section 2(49)(o); and Section 43B becomes Section 37.

The rule itself changes. As amended by the Finance Act 2026, Section 29(1)(e) allows the deduction if the employee contribution is credited to the fund on or before the due date for filing the return under Section 263(1) (old Section 139(1)) for that tax year. The PF / ESI due date no longer decides the deduction, so the Checkmate Services disallowance for a short delay ends with FY 2025-26. Interest and damages under the PF and ESI laws for late deposit still apply.

If you pick FY 2026-27 above, the table applies this rule: it still shows the PF / ESI due date and flags a late deposit, but disallows only what is unpaid on the return due date you enter (31 October 2027 by default). The amendment is reported from the Finance Act 2026; read the amended Section 29(1)(e) before you sign on it. FY 2025-26 and earlier years stay under Section 36(1)(va), tested against the 15th. The tax audit report for tax year 2026-27 is Form 26, not Form 3CD.

Tax audit season

The law is short; the table breaks.

The payroll challan may be correct while Clause 20(b) is still wrong. The disclosure fails when the employee share is mixed with employer contribution, the due date is treated as the income-tax return date, or the payment date is copied from books instead of the portal challan.

Next step

Finish the tax audit file.

Open Form 3CD template TDS default calculator EPF contribution calculator

Building the broader Form 3CD file? Start with the 3CA / 3CB / 3CD guide and the Clause 34 TDS/TCS guide.

How Clause 20(b) is prepared

Form 3CD clause 20(b) asks the tax auditor to report employee contributions received by the assessee towards provident fund, superannuation fund, ESI or any other employee welfare fund. The useful working-paper columns are: month, nature of fund, amount received from employees, statutory due date, actual amount paid, actual date of payment, and disallowance.

For PF and ESI, the ordinary monthly due date is the 15th of the following month. This calculator applies that 15th-of-next-month rule by default and lets the user tag a row as PF, ESI, LWF or Other. For state-specific LWF periods, replace the due date in the exported Excel file if the state rule differs.

The key audit trap is the actual amount paid column. Clause 20(b) is about employee contribution, so the amount should not include employer contribution, PF admin charges, EDLI, ESI employer share, interest or damages. If the challan amount is pasted, the disclosure can look paid even when the employee-share trail is not supportable.

Worked example: May salary PF paid on 18 July

The assessee deducted employee PF of ₹1,20,000 from May payroll. The statutory due date was 15 June. The challan was paid on 18 July.

Inputs

Nature of fundPF

Employee contribution₹1,20,000

Due date15 June

Actual date of payment18 July

Output

Clause 20(b) statusLate

Delay33 days

Tax treatment₹1,20,000 disallowed u/s 36(1)(va)

Payment before the income-tax return due date does not cure the employee-contribution delay. After Checkmate Services, the relevant due date is the welfare-law due date.

Common mistakes

Using the total challan amount

PF and ESI challans include employer contribution and sometimes admin charges, interest or damages. Clause 20(b) needs only the employee contribution received from employees.

Applying Section 43B logic to employee contribution

Employer contribution may be tested under Section 43B. Employee contribution is tested under Section 36(1)(va) against the welfare-law due date.

Filling the due date as the income-tax return due date

The due date column in Clause 20(b) is the PF/ESI/LWF due date, ordinarily the 15th of the following month for PF and ESI.

Relying only on ledger posting date

Use the EPFO/ESIC challan payment date or bank debit evidence. A ledger entry dated on time does not prove statutory remittance.

Missing partial payments

If only part of the employee contribution is paid by the due date, the unpaid or late-paid balance is the exposure. The export keeps actual employee amount paid separate from the amount deducted.

Frequently asked questions

What is reported in Form 3CD Clause 20(b)?+

Clause 20(b) reports employee contributions received by the assessee towards provident fund, superannuation fund, ESI or any other employee welfare fund, along with the due date, actual amount paid and actual date of payment.

What amount should be entered as actual amount paid in Clause 20(b)?+

Enter only the employee contribution paid to the fund. Do not enter the full challan if it includes employer contribution, PF admin charge, EDLI, interest or damages.

What is the due date for PF and ESI employee contribution?+

For ordinary monthly remittances, PF and ESI contributions are due by the 15th of the following month. State labour welfare fund due dates vary and should be checked state by state.

Is employee contribution allowed if paid before the income-tax return due date?+

No. Employee contribution is allowed only if paid by the due date under the relevant welfare law. The Section 43B return-due-date relief does not apply to employee contribution after the Supreme Court decision in Checkmate Services.

What is the due date for employee PF / ESI contribution deduction in FY 2026-27 under the Income-tax Act 2025 (new section for 36(1)(va))?+

For FY 2026-27 (tax year 2026-27) the deduction is allowed if the employee contribution is credited to the fund on or before the due date for filing the return under Section 263(1), not the PF / ESI due date. The provision is Section 29(1)(e) of the Income-tax Act 2025, which replaces Section 36(1)(va) and was amended by the Finance Act 2026; Section 43B becomes Section 37. This first shows up in tax audits signed in 2027. FY 2025-26 and earlier years remain under Section 36(1)(va) and the Checkmate Services rule.

Where does the disallowance go in the tax audit file?+

The late employee contribution is disclosed in Clause 20(b) and disallowed under Section 36(1)(va) in the tax computation. Employer contribution delays are analysed separately under Section 43B and Form 3CD clause 26.

Authoritative sources

Income-tax Act, 1961 - Section 36(1)(va) and Section 2(24)(x) — Employee contribution collected by the employer is income under Section 2(24)(x) and deductible only if credited by the due date under the relevant welfare law.

Supreme Court - Checkmate Services Pvt Ltd v CIT — The Supreme Court held that Section 43B does not override the due-date condition for employee contributions under Section 36(1)(va).

Always confirm against the latest version of the source. Regulations evolve and amendments are common.

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Form 3CD tax audit template →3CA vs 3CB vs 3CD explained →EPF contribution calculator →ESI contribution calculator →Form 3CD Clause 34 guide →

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Last reviewed: 2026-10-01 · For informational purposes only — not professional advice.