Section 43B(b)

Section 43B(b) — the law in short

What the courts have decided on section 43B(b), in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• CIT v Alom Extrusions Ltd Supreme CourtHelps taxpayer
  I paid the PF contribution after year end but before the return due date. Is the deduction gone?
  No, for the employer's own contribution. The deletion of the second proviso to s.43B and the amendment of the first proviso by the Finance Act 2003 are curative and operate retrospectively from 1 April 1988, so employer's contributions to provident and other welfare funds paid before the return due date are deductible.
• Ambalal Sarabhai Enterprises Ltd v DCIT High CourtHelps taxpayerNo later treatment found
  The Assessing Officer has swept my gratuity and leave encashment payments into the s.35DDA five-year spread along with the VRS compensation. Must terminal benefits be amortised too?
  No. The Gujarat High Court held that gratuity and leave encashment are post-retirement benefits accruing from actual service rendered, payable whether retirement is voluntary or on superannuation, and are ancillary to — not part of — the voluntary retirement scheme. Only the VRS compensation component falls into the one-fifth spread under s.35DDA; the terminal benefits are deductible in full.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.