Corporate tax

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Sabitha (Querist)
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04 January 2008
Hi,

If a company reduces the number of its employees (Eg. may be from 500 to 400) in any financial year, Does it have any impact on tax front?

R.V.RAO

R.V.RAO (Expert)
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04 January 2008 THE FBT PORTION OF TAX SAVING IS THERE.
BUT THE ADMISSIBLE EXPENDITURE UNDER MANPOWER LIKE SALARIES, EMPLOYER CONT. OF STATUTORY BENEFITS ETC...IS REDUCED ,THEREBY INCREASING TAXABLE PROFITS.
IN CASE OF REDUCTION OF MANPOWER UNDER A LAY OFF OR TEMPORARY OR PERMANENT CLOSURE UNDER INDUSTRIAL OR LABOR LAW OR FACTORY REGULATORY FRAME, IF ALL THE STATURTORY APPROVALS ARE AVAILABLE, YOU MAY CLAIM ALL VALID RETRENCHMENT COMPENSATION AND LAY OFF EXPENDITURE ETC. AS DEDUCTIBLE EXP.
R.V.RAO

Sabitha

Sabitha (Querist)
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04 January 2008 Thank you so much.

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