80jjaa

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Querist : Anonymous

Querist : Anonymous (Querist)

25 January 2013 sir,

please explain me 80jjaa deduction with example

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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25 January 2013 Section 80JJAA is the section in which it seems that the FM had unwillingly and under pressure introduced the provision in the law.
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The provision is applicable in respect of an Indian Company's Industrial Undertaking
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The Deduction allowable is 30% of Additional Wages. Workman should not be a casual or contract workman.
A qualified permanent Workman should be paid wages of at least 300 Days.
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Additional Wages have two different criteria depending upon the fact whether the Unit is new or old.
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New unit :1. Minimum Required Workman 100.
2. Unit employs 125 new workers.
3. So wages paid to 25 new workers is Called the Additional Wages.
4. Suppose these 25 workers are paid @4000 pm for 11 months . Additional Wages
for the previous year = 11,00,000/-
5. 30% of 11.00 lac is the amount deductible U/s 80JJAA i.e 3.30 lakhs can be deducted from the company's GTI.
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If the unit starts on 06.06.xxxx it will not get any deduction as 300 days condition for workman's employment is not complied.
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EXISTING UNIT :
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The above unit will become existing unit in the next year.
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Or any other existing unit which employs more than 10% new workers-then it will be eligible for deduction.
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Taking the above case if the unit is having 125 workmen and employs 15 more new workers- wages paid to these will be treated as additional wages.
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I hope, now you may understand the provisions clearly.
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