ESI computation

[Guest]

ESI Cheque depoisted in Bank before 20th , Cleared on 23rd.whether will be added in computation in terms of section 2(24)r.w 36(va). If no please quote case laws.

[DEV KUMAR KOTHARI]

The date of tender of cheque is the date of depsoit or payment, further has has also been cleared within three days and it was not a case of return of cheque. So the payment is allowable even as per old law. Now payment made is allowable in the year of paymetn without consideration of due date as the second proviso has been omitted. See S. 43B

AI Summary

Payment timing under Section 43B determines tax deductibility when an ESI cheque is deposited and promptly cleared. The deposit/tender date of an ESI cheque is treated as the date of payment when the cheque is deposited and subsequently honoured promptly without return; due date linkage has been removed and, under Section 43B principles, such payment is allowable in the year of payment for tax computation.