Section 80JJAA Deduction in respect of employment of new employees

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The Tax Publishers [1][80JJAA. Deduction in respect of employment of new employees. (1) Where the gross total income of an assessee to whom Section 44AB applies, includes any profits and gains derived from business, there shall, subject to the conditions specified in sub-section (2), be allowed a deduction of an amount equal to thirty per cent. of additional employee cost incurred in the course of such business in the previous year, for three assessment years including the assessment year relevant to the previous year in which such employment is provided. (2) No deduction under sub-section (1) shall be allowed, (a) if the business is formed by splitting up, or the reconstruction, of an existing business: Provided that nothing contained in this clause shall apply in respect of a business which is formed as a result of re-establishment, reconstruction or revival by the assessee of the business in the circumstances and within the period specified in Section 33B; (b) if the business is acquired by the assessee by way of transfer from any other person or as a result of any business reorganisation; (c) unless the assessee furnishes [2][the report of the accountant, as defined in the Explanation below sub-section (2) of Section 288, before the specified date referred to in Section 44AB] giving such particulars in the report as may be prescribed. Explanation.For the purposes of this section, (i) additional employee cost means total emoluments paid or payable to additional employees employed during the previous year: Provided that in the case of an existing business, the additional employee cost shall be nil, if (a) there is no increase in the number of employees from the total number of employees employed as on the last day of the preceding year; (b) emoluments are paid otherwise than by an account payee cheque or account payee bank draft or by use of electronic clearing system through a [3][bank account or through such other electronic mode as may be prescribed][4]: SUBSCRIBE FOR FULL CONTENT

The Tax Publishers

[1][80JJAA. Deduction in respect of employment of new employees.

(1) Where the gross total income of an assessee to whom Section 44AB applies, includes any profits and gains derived from business, there shall, subject to the conditions specified in sub-section (2), be allowed a deduction of an amount equal to thirty per cent. of additional employee cost incurred in the course of such business in the previous year, for three assessment years including the assessment year relevant to the previous year in which such employment is provided.

(2) No deduction under sub-section (1) shall be allowed,

(a) if the business is formed by splitting up, or the reconstruction, of an existing business:

Provided that nothing contained in this clause shall apply in respect of a business which is formed as a result of re-establishment, reconstruction or revival by the assessee of the business in the circumstances and within the period specified in Section 33B;

(b) if the business is acquired by the assessee by way of transfer from any other person or as a result of any business reorganisation;

(c) unless the assessee furnishes [2][the report of the accountant, as defined in the Explanation below sub-section (2) of Section 288, before the specified date referred to in Section 44AB] giving such particulars in the report as may be prescribed.

Explanation.For the purposes of this section,

(i) additional employee cost means total emoluments paid or payable to additional employees employed during the previous year:

Provided that in the case of an existing business, the additional employee cost shall be nil, if

(a) there is no increase in the number of employees from the total number of employees employed as on the last day of the preceding year;

(b) emoluments are paid otherwise than by an account payee cheque or account payee bank draft or by use of electronic clearing system through a [3][bank account or through such other electronic mode as may be prescribed][4]: