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??
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.
CAclubindia
