Gratuity provision and payment
This query is : Resolved
Harish Chandra
(Querist)
25 September 2011
Please clarify me about Gratuity under income tax act 1961. Is it allowed in P and L of Business and Profession or not
CA Vanesh Nadar
(Expert)
25 September 2011
Hi Harish
The Gratuity is related with Section 43B of the Income-tax Act, 1961 i.e. certain expenses allowed only on actual payments.
As such, the Provisions made in the Profir & Loss of Current Year is dis-allowed and where as any payments made during the year out of earliest years provisions or out of current years provision is allowed as deduction in computation of Total Income.
I hope, you question has been resolved.
Regards
CA Vanesh Nadar
The Gratuity is related with Section 43B of the Income-tax Act, 1961 i.e. certain expenses allowed only on actual payments.
As such, the Provisions made in the Profir & Loss of Current Year is dis-allowed and where as any payments made during the year out of earliest years provisions or out of current years provision is allowed as deduction in computation of Total Income.
I hope, you question has been resolved.
Regards
CA Vanesh Nadar
Harish Chandra
(Querist)
25 September 2011
Thanks sir, for your answer
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