Comparison of Section 29 'Deductions related to employee welfare' between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)

Deductibility of gratuity provisions clarified: certain gratuity provisions deductible despite a general prohibition, with anti double deduction rule.

Section 29 permits employer deductions for specified employee welfare payments: recognised provident and approved superannuation contributions subject to prescribed limits and Board conditions; pension scheme contributions subject to a statutory ceiling with a defined salary concept; contributions to approved gratuity funds held in irrevocable trust; provisions for contributions to such gratuity funds or for payment of gratuity that has become payable during the tax year; and employee contributions credited by the prescribed due date. The As Passed text clarifies that the allowance for certain gratuity provisions operates notwithstanding the general disallowance on provisions, and prevents a second deduction on actual payments where a provision deduction was already claimed.