Cana Anyone suggest me the explaination to Section 36 (1) (ii), I am unable to understand the facts??
1 Replies
CA Prateek Garg
(CA in Practice)
(1447 Points)
Replied 13 June 2014
As per Section 36(ii) any amounts paid to employees in the form of Bonus & Commission can be claimed as deduction.
However it also provide that if Bonus/Commission is payable in lieu of Profit/Dividend then such Bonus commission is not allowed as deduction.
Suppose any employee of a company is authorized to get 10% of profits of company. then such 10% would not be allowed as deduction to the company.
In such a case company do tax planning. Instead of paying the amt in the form of share of profit company declared an equivalent amt of bonus for the employee.
since bonus is paid by the company in lieu of Profit/Dividend hence same cant be allowed as deduction by virtue of section 36(ii)
Recent Topics
- Avoiding tax audit in case of intraday equity loss
- Form 3CEAB
- Form 3CEAA and Form 3CEAB
- DIR 3 Web KYC
- Can i declare LTCG income as business income if I
- Stock entry in new software
- I have an EMI collection shop, what is its SAC cod
- Making payment once in quarter possible under QRMP
- Master File Documentation related
- Applicability of 44AD needs clarification
Related Threads
CAclubindia
