Criteria for claiming deduction u/s 80JJAA for employees of the software industry

Last updated: 19 May 2021

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Quick Summary

This Karnataka High Court judgement clarifies the eligibility for claiming deductions under Section 80JJAA of the Income Tax Act for software companies. The court ruled that the 300-day employment criterion for new workmen must be met within the previous financial year, and employment in subsequent assessment years cannot be considered to meet this requirement. The case also touched upon deductions for lease rentals on vehicles.

Court :
Karnataka High Court

Brief :
The respondent is in the business of manufacture and export of computer software. It filed returns of income for the Assessment Year 2008-09 on 30.09.2008, declaring an income of Rs.98,03,41,570/- which was processed on 8.06.2011, determining the total income of the same amount. Returns were taken up for scrutiny after issuance of statutory notice under Section 143(2) on 14.09.2009.

Citation :
I.T.A. NO.141 OF 2020

Daily Limit Reached