Deduction u/s 80jjaa

This query is : Resolved

Guest

Guest (Querist)

09 November 2017 Following query relate to deduction u/s 80JJAA.

While claiming deduction u/s 80JJAA whether the Additional number of employees eligible for deduction can be more than increase in number of employees employed during the financial year (i.e. Number of employees on 31st march 2017 less employees on 31st march 2016.)

For example:

employees on 31.03.2016 200
Addition employees appointed in April 2016 70
employees left during FY 2016-17 30

employees on 31st march 2017 240

In the above example should we claim deduction for
(i) 40 employees (i.e. 240 less 200) or
(ii) 70 employees

we were of the opinion that deduction should be claimed for 70 employees ( as law is silent regarding reduction of left employees).

Now please have look on Annexure to Form 10 DA.
it says that number of additional employees eligible for deduction not exceeding number of increase in employees
during financial year.

kindly assist whether we should limit the number of additional employees to net increase in the number of employees.

Sumeet

Sumeet (Expert)
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09 November 2017 As per my opinion, the intention of the lawmakers is to limit the number of additional employee employed during previous year to net increase in number of employees compared to last year.

This is clear from the wordings used in Section 80JJAA, where Additional Employee is defined as an "Employee who has been employed during the previous year and whose employment has the effect of increasing the total number of employees employed by the employer as on the last day of the preceding year."

Also if you refer Form 10DA, it is clearly mentioned in computation of Additional Cost eligible for deduction that Number of additional employee entitled for deduction should not exceed the number of increase in number of employee.

So as per my interpretation, you should limit the number of additional employees to net increase in number of employees.