Section 43B(f)

Section 43B(f) — the law in short

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

• Union of India v Exide Industries Ltd Supreme CourtHelps departmentNo later treatment found
  Can I deduct my provision for leave encashment in the year I make it, or only when I pay?
  Only when paid. Section 43B(f) is constitutionally valid: it does not touch your choice of accounting method or take away the deduction, it adds a condition of actual payment for that head and defers the benefit to the year of payment.
• 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.