Section 6 - Amendment of Section 40 - Finance Act, 1963

6. Amendment of Section 40 In section 40 of the Income tax Act, in clause (c),- (1) Before the Explanation, the following sub clause shall be inserted namely : (iii) any expenditure which results directly or indirectly in the provisions of any remuneration or benefit or amenity to an employee who is a citizen of India to the extent such expenditure exceeds the amount calculated at the rate of five thousand rupees per month for any period of his employment after the 28th day of February, 1963 : Provided that in computing the aforesaid expenditure, any payments by way of gratuity or any sums comprised in the transferred balance of an employee participating in a recognised provident fund referred to in clause (vii) of sub section (1) of section 17, or the amount of any compensation referred to in clause (i) or any payment referred to in clause (ii) of sub section (3) of that section shall not be taken into account. . (2) In the Explanation after the words, brackets and figure referred to in sub clause (i) , the words, brackets and figures or in sub clause (iii) shall be inserted.