Is it necessary that an assessee intending to claim deduction u/s 80JJAA of the Income Tax Act should employ more than 50 NEW REGULAR workmen as per amended provisions ?
Or is it sufficient that more than 50 WORKMEN are employed during the year ?
Tony John (Chartered Accountant) (6085 Points)
11 March 2016Is it necessary that an assessee intending to claim deduction u/s 80JJAA of the Income Tax Act should employ more than 50 NEW REGULAR workmen as per amended provisions ?
Or is it sufficient that more than 50 WORKMEN are employed during the year ?
shweta bhatter
(CA)
(173 Points)
Replied 11 March 2016
The basic essence of the section is to encourage generation of employment. It is therefore necessary that the assessee shall employ NEW regular employees to claim deduction @ 30% on additional wages. Additional wages means "to mean the wages paid to the new regular workmen in excess of one hundred workmen employed during the previous year."
Tony John
(Chartered Accountant)
(6085 Points)
Replied 11 March 2016
Madam the limit of 100 workmen has now been reduced to 50. My doubt is whether 50 refers to NEW REGULAR workmen ? Or all workmen put together ?
I found different interpretations in Institute material and other books.
shweta bhatter
(CA)
(173 Points)
Replied 11 March 2016
In order to enable the smaller units to claim this incentive, it is proposed to extend the benefit under the section to units employing even 50 instead of 100 regular workmen.
50 refers to new regular workmen.
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