{"id":56964,"date":"2025-10-09T13:14:33","date_gmt":"2025-10-09T07:44:33","guid":{"rendered":"https:\/\/itatonline.org\/digest\/?post_type=qa&#038;p=56964"},"modified":"2025-10-09T13:14:33","modified_gmt":"2025-10-09T07:44:33","slug":"gratuity-and-le-in-case-of-transfer-in-group-entities","status":"publish","type":"qa","link":"https:\/\/itatonline.org\/digest\/qa\/gratuity-and-le-in-case-of-transfer-in-group-entities\/","title":{"rendered":"Gratuity and LE in case of transfer in group entities"},"content":{"rendered":"<p data-start=\"301\" data-end=\"443\">A company has transferred certain employees to another group entity along with the related <strong data-start=\"392\" data-end=\"404\">Gratuity<\/strong> and <strong data-start=\"409\" data-end=\"429\">Leave Encashment<\/strong> provisions.<\/p>\n<p data-start=\"445\" data-end=\"698\">The <strong data-start=\"449\" data-end=\"470\">receiving company<\/strong> has increased its provision by <strong data-start=\"502\" data-end=\"514\">debiting<\/strong> the transferring company, and the <strong data-start=\"549\" data-end=\"573\">transferring company<\/strong> has reduced its provision by <strong data-start=\"603\" data-end=\"616\">crediting<\/strong> the receiving company. No actual payment has been made to the employees so far.<\/p>\n<p data-start=\"700\" data-end=\"960\">As per my understanding, the amount transferred should be <strong data-start=\"758\" data-end=\"797\">allowed to the transferring company<\/strong> by treating it as a paid amount, and <strong data-start=\"835\" data-end=\"875\">disallowed for the receiving company<\/strong> as an expense not actually paid under <strong data-start=\"914\" data-end=\"929\">Section 43B<\/strong> of the Income-tax Act, 1961.<\/p>\n<p data-start=\"962\" data-end=\"1146\">Kindly clarify whether this interpretation is correct and how the transaction should be treated for tax purposes under Section 43B in such inter-company employee provision transfers.<\/p>\n","protected":false},"comment_status":"open","ping_status":"closed","template":"","qa_expert":[1275],"qa_category":[23],"qa_tag":[1375],"class_list":["post-56964","qa","type-qa","status-publish","hentry","qa_expert-law-intern","qa_category-income-tax","qa_tag-section-43b"],"acf":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/qa\/56964","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/qa"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/qa"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=56964"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=56964"}],"wp:term":[{"taxonomy":"qa_expert","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/qa_expert?post=56964"},{"taxonomy":"qa_category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/qa_category?post=56964"},{"taxonomy":"qa_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/qa_tag?post=56964"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}