Prize money to employees kids and condolence money on death

This query is : Resolved

llllVICTORllll (Querist)
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20 October 2012 Hi I got 2 doubt on section 37 of income tax act.

situation 1:companies pays cash prize for employees' kids for securing good marks in exam at Rs. 4000 to 5000 per kid, and debiting it to education allowance.

Situation 2: companies pays employee for death of any of their relative(say father, or mother or wife etc etc) around rupees 5000 as condolence and for last rite rituals.

Are these expenses allowable business expenditure under income tax act??

Soumitra Basu

Soumitra Basu (Expert)
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21 October 2012 YES, BOTH THE EXPENSES ARE UNDER EMPLOYEE WELFARE SCHEME FOR SMOOTH RUNNING OF THE BUSINESS. HENCE, ALLOWABLE UNDER SECTION 37 OF THE ACT.