Prohibition on deduction for gratuity provisions allows conditional relief if an approved irrevocable gratuity fund is established and funded. Section 40A(7) bars deduction for mere provisions for gratuity while preserving deductions for contributions to approved gratuity funds and actual gratuity payments. For assessment years 1973 74 to 1975 76 a saving allows deduction up to the admissible amount where the provision is based on an actual valuation, an irrevocable trust gratuity fund is created and approval sought, and at least half the admissible amount is paid into the fund within the prescribed time; remaining rules govern prior payments, disallowance if conditions unmet, reassessment/rectification, instalment payments with interest, and waiver of penalties/interest for reliance on prior Board guidance.
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.
Prohibition on deduction for gratuity provisions allows conditional relief if an approved irrevocable gratuity fund is established and funded.
Section 40A(7) bars deduction for mere provisions for gratuity while preserving deductions for contributions to approved gratuity funds and actual gratuity payments. For assessment years 1973 74 to 1975 76 a saving allows deduction up to the admissible amount where the provision is based on an actual valuation, an irrevocable trust gratuity fund is created and approval sought, and at least half the admissible amount is paid into the fund within the prescribed time; remaining rules govern prior payments, disallowance if conditions unmet, reassessment/rectification, instalment payments with interest, and waiver of penalties/interest for reliance on prior Board guidance.
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