Deduction for gratuaity fund

This query is : Open

Rajendra Mehta (Querist)
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17 September 2012 Dear sir,

One of my Client, a limited company is making gratuity provision based on acturial valuation report and they are not maintaining any fund for the same.
Whether the amount is inadmissible under section 40A(3) Rule 6DD mentioned in tax audit report 44 AB.

Pl reply
Thanks

Rathin Roy

Rathin Roy (Expert)
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19 September 2012 Please refer to Section 40A(7) of the Income Tax Act which specifies that no deduction on this account shall be allowed on the basis of mere provision unless such provision has been made for amounts payable as contribution to an approved gratuity fund or in respect of any gratuity that has actually become payable during the previous year. However such sums also have to be paid before the due date of filing of return.

Guest

Guest (Expert)

27 September 2012 agree with Rathin.
not provision, payment done before due date of filing of retuen is deductible
in case of gearuity, leave encashment , pf contributions

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