06/02/2019
Provision for payment of gratuity under section 40A(7) :-
No deduction is allowed in computing business income in respect of a mere provision made by the assessee in his books of account for the Payment of gratuity employees on retirement or termination of empyoyment or for any other reason. The provision made for the purpose of payment of sums by way of contribution towards an approved gratuity fund or for the purpose of making any payment on account of gratuity that has become payable during the previous year is however, eligible for deduction.
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