Eligible Assessee:
Under this section 35DDA is applicable to All Assesseee.
Eligible Amount of Deduction:
- This deduction is allowed in 5 equal installment for the 5 years.
- No deduction of voluntary retirement scheme expenses under any other section.
- In case amount paid in instalment, deduction allowed for each instalment separately in 5 years.
Conditions for claiming deduction under section 35DDA:
Following are the conditions for getting eligible for claiming deduction under section 35DDA of the Income Tax Act–
- An Assessee has paid a sum of amount to an employee,
- Such amount is paid on account of the voluntary retirement of the employee, and
- Such voluntary retirement is in accordance with any scheme/ schemes of voluntary retirement.
If all the above conditions are satisfied, the assessee paying the sum (i.e. incurring the expenses) would be eligible for availing the deduction, against such expenses, under section 35DDA of the Income Tax Act.
Notably, expenditure claimed as deduction under section 35DDA will not be allowed as the deduction under any other provisions of the Income Tax Act.
Effect Of Amalgamation Or Demerger:
In case of transfer of undertaking under the scheme of amalgamation or demerger, the amalgamated company or resulting company (being Indian company) as the case may be, shall be entitled to claim deduction under section 35DDA for the residual period as if the amalgamation or demerger had not taken place.
Effect of Succession of Business:
Where there has been reorganization of business, whereby a firm or proprietary concern is succeeded by a company fulfilling the conditions laid down in section 47 (xiii) & (xiv) or a private company or unlisted public company is succeeded by a limited liability partnership fulfilling the conditions laid down in section 47 (xiiib), the provisions of this section shall apply to the successor concern, as they would have applied to the predecessor, if reorganization of business had not taken place. Further, it is to be noted that:
- No deduction shall be allowed to amalgamating company, demerged company, a firm, proprietary or other concern in the previous year in which amalgamation, demerger or succession, as the case may be, takes place
- No deduction shall be allowed in respect of such expenditure under any other provisions of the Act.
