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Tax audit - 43b disallowance

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vivek anandan

21 Points Posted on 15 December 2021

under sec 43b we can claim as deduction only on payment basis.. what is payment? whether the employee has gone without giving notice period money and the company has to give bonus to him. so out of the money which the employee should give pay to the company, the company deducted the bonus to paid to the employee. now whether the set off amount can be claimed as deduction or not? it will be treated as payment, right?

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Quick Summary

This discussion clarifies the 'payment basis' requirement under Section 43B of tax law. It specifically addresses whether a set-off amount, where an employee's bonus is deducted to cover their unpaid notice period, can be considered a valid payment for tax deduction purposes. The consensus is that such a set-off does indeed qualify as a payment under Section 43B.