Benefit of income tax against the payment of gratuity

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Raghav (Querist)
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19 December 2014 Dear Sir,

Suppose that if any company paying the gratuity but they have not done the acturial valuation and they have not created the trust with LIC or some other notified authority but making the payment to the employees who have completed 5 years or more when they leave the job.

Sir, my query is do that company get the income tax benefit of the payment in the same financial year or there is some process to get the exemption.

The calculation of the gratuity is being done as follows:

Last basic *15/26* no of years ( completed as on last March 31)

Please advice the same. I would be thankful to you.

CA Kumar Mukesh

CA Kumar Mukesh (Expert)
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20 December 2014
Yes as per section 43B i.e. equal to the amount paid on before the due date of filling return of income, irrespective of amount and whether or not provision made in the books of account

Raghav

Raghav (Querist)
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20 December 2014 Hello Sir,

Thank you!! Yes as per the section we can have the amount allowed if we make the payment but my question is different. The assessee is not registered with Gratuity act 1972 and also there is no valuation method in the company. The trust has not been created and not informed to Income tax india which means there is no intimation have been sent to revenue. In this circumstances does assessee can get the exemption of the amount.

Please suggest me the same.

CA Kumar Mukesh

CA Kumar Mukesh (Expert)
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20 December 2014 For claiming deduction under section 43B, neither required to be registered under Gratuity Act nor to be informed to Income tax Department.

what is important payment should be made on before the date of filling of return of income

Raghav

Raghav (Querist)
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20 December 2014 Hello Sir, Thank you so much!!

CA Kumar Mukesh

CA Kumar Mukesh (Expert)
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20 December 2014 Thanks should be thank user so that my score board can increase

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