Amortisaton of expenses VRS (Income Tax)

This query is : Open

shamkant

( Author )
17 January 2011

1)We introduce VRS scheme and paid VRS amount to left employee. What will be the accounting entry i.e whole amount debited to P& L a/c and second what effect on computation of income. pls explain

CA PARAS BAFNA

( Expert )
17 January 2011

One fifth of the amount paid has to be debited to the P&L A/c as Expenditure of this year.

Balance of the amount paid has to be written off in the next four years.
Pl Refer Section 35DDA