Bonus or commission paid to employees - Section 36(1)(ii) - Income Tax - Ready Reckoner - Income Tax

Bonus or commission paid to employees - Section 36(1)(ii) Any sum paid to employees as bonus or commission otherwise than payable as profits or dividends is allowed as deduction Deduction is allowed even if the payment exceeds the bonus payable under the Payment of Bonus Act. This bonus need not be within the statutory limits specified under Payment of Bonus Acts. It is sufficient if it paid within the time limits. This deduction is allowed on payment basis, but can be claimed on accrual basis subject to provisions of section 43B . Case Law - DCIT-4 (1) (1) , Mumbai vs M/s Enam Securities Pvt. Ltd. and (vice-Versa) [ 2019 (2) TMI 894 - ITAT MUMBAI ] The assessee has submitted that the outstanding bonus was customary bonus and not filing u/s. 36(1)(ii) to come under the ambit of disallowance u/s. 43B(C) - It was duly held that the customary bonus do not attract the provision of section 36(1)(ii) and, hence, as a consequence they did not attract the disallowance u/s. 43B(C) .