Compensation to workmen in case of death of worker on duty.


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Querist : Anonymous

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Querist : Anonymous (Querist)
15 June 2013 IS COMPENSATION PAID TO WORKMEN IN CASE OF DEATH OF WORKMEN AN ALLOWABLE BUSINESS EXPENSE UNDER SECTION 37(1)....??

15 June 2013 In case the Service Contract have a mention about the same the payment or the payment is required to be paid under certain statute, like workmen Compensation Act then it is certainly allowable.
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In my opinion, if the payment is voluntarily given by the employer up to a reasonable extent can also be claimed as a deduction.
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Querist : Anonymous

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Querist : Anonymous (Querist)
16 June 2013 ok thank u sir...
Bt my client dont have any such clause in service agreement for death compensation with the employee...

So can he claim such expense as deduction...??

16 June 2013 He can claim a reasonable amount paid to the employee as in such a case the employer can very well take the ground of commercial expediency.
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In case of Indian Leaf Tobacoo Development Co. Ltd. Ex-gratia payments to the dependants of former employees have been allowed as expenditure.
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