Restrictions on Deductions for Gratuity Provisions - (New) Section 29(2) / (Old) Section 40A(7)

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....und or for the purpose of payment of any gratuity that has become payable during the tax year; [ Section 29(1)(d) ] Exception [ Section 29(2) ] • no deduction shall be allowed for any provision made for the payment of gratuity to the employees on their retirement or termination for any reason; and • in case deduction has been allowed for any provision made under sectio....

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.... • An employee retires during the current year. Gratuity payable to him. A part of amount is paid during the current year and the balance will be paid in the next year. A provisions is made gratuity in the books of account of the current year for the making payment in the next year. The entire amount is deductible during the current year if no deduction was claimed earlier. In the case, de....