Deduction for gratuity provisions disallowed where merely held in accounts; approved fund contributions and payable gratuities remain deductible.

An amendment prevents deduction for mere provisions for gratuity recorded in employers' books, while preserving deductibility for contributions paid to approved gratuity funds and for gratuities that have actually become payable. Earlier Board guidance that actuarial provisions represented real liabilities and were deductible was withdrawn in light of later judicial decisions; subsequent clarifications require year-by-year allowance only for provisions made in that year, distinct accounting for prior-service gratuity liabilities, and employee-specific actuarial consideration.

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