Provision of gratuity reduction effect in income tax

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Lavy Singhal

67 Points Joined December 2017

when provision of gratuity reduced by private company then whether provision effect amount is reduced or not from profit as per income tax?

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Provision of Gratuity is specifically disallowed u/s 40A(7). But the actual "payment" towards the recognised Gratuity Fund is allowable u/s 36(1)(v). Further, when gratuity is directly "Paid" to the employee, such expenditure is allowable u/s 37(1). In addition to these provisions, conditions u/s 43B needs to be complied.

Thank You