Gratuity provision and payment

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Harish Chandra (Querist)
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25 September 2011 Please clarify me about Gratuity under income tax act 1961. Is it allowed in P and L of Business and Profession or not

CA Vanesh Nadar

CA Vanesh Nadar (Expert)
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25 September 2011 Hi Harish

The Gratuity is related with Section 43B of the Income-tax Act, 1961 i.e. certain expenses allowed only on actual payments.

As such, the Provisions made in the Profir & Loss of Current Year is dis-allowed and where as any payments made during the year out of earliest years provisions or out of current years provision is allowed as deduction in computation of Total Income.

I hope, you question has been resolved.

Regards

CA Vanesh Nadar

Harish Chandra

Harish Chandra (Querist)
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25 September 2011 Thanks sir, for your answer

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