Contingent liability for leave wages is not deductible under income tax; deduction arises only when the obligation becomes payable. An employer's obligation to pay 'leave with wages' becomes payable only when a worker takes leave, is discharged, or quits after refusal; until such triggering events occur the liability is a contingent, unascertained obligation, and anticipatory provisions for these leave payments are not allowable deductions under the Income-tax Act.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Contingent liability for leave wages is not deductible under income tax; deduction arises only when the obligation becomes payable.
An employer's obligation to pay "leave with wages" becomes payable only when a worker takes leave, is discharged, or quits after refusal; until such triggering events occur the liability is a contingent, unascertained obligation, and anticipatory provisions for these leave payments are not allowable deductions under the Income-tax Act.
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