Deduction in respect of Employment of New Workmen [80 JJAA]

With effect from assessment year 1999-2000, an Indian company is alongwith for deduction provided the following conditions are satisfied :

(i) The gross total income of the assessee includes profits and gains derived from any industrial undertaking

(ii) Such industrial undertaking is engaged in the manufacture or production of article or thing.

(iii) Such industrial undertaking is not forwarded by (a) splitting up of an existing undertaking, or (b) reconstruction of an existing undertaking or (c) amalgamation with another Industrial undertaking.

(iv) The assessee employs new regular workmen in the previous year

(v) The assessee furnishes the report of a chartered accountant in Form No. 10DA [Rule 19AB]

Deduction is available for 3 previous years commencing from the previous year in which such employment is provided.

Amount of deduction

(i) New Industrial undertaking : 30% of the wages paid to regular workmen in excess of 100 regular workmen employed during the year.

(ii) Existing undertaking : 30% of the wages paid to new regular workmen provided these is at least 10% increase in number of regular workmen over the existing member of workmen employed in such undertaking, as on the last day of the preceding year.

Regular workmen
It does not include :–
(a) a casual workmen or
(b) a workmen employed through contract labour; or
(c) any other workman employed for a period of less than 300 days during the previous year.

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