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)

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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