Recently CBDT has vide notified Notification No. 104/2019 dated December 18, 2019, revised FORM No. 10DA under rule 19AB of Income Tax Rules vide. Form 10DA contains the format of the report prescribed under section 80JJAA of the Income-tax Act, 1961 (‘the Act’). Form 10 DA has been prescribed in accordance with Rule 19 AB of Income Tax Rules 1962 and is part of Appendix II of the aforesaid Rules.
Form 10 DA contains the report to be given by a practicing chartered accountant holding a valid certificate of practice and who is not a disqualified person as referred to in clause (a) or clause (b) of the Explanation below sub-section (2) of section 288. Section 80JJAA provides for a tax deduction in respect of new employees allowed under Chapter VI-A of the Act. Further, it has been provided that where the taxpayer is opting for benefit of provision to sec 115BAA or Sec. 115BAB, all other deduction under Chapter VI-A will be disallowed except the deduction for new employee compensation under Sec. 80JJAA deduction on employment.
This implies that even for taxpayers opting for a lower tax of 17 percent or 22 percent, the deduction of section 80 JJAA is available. Further, the aforesaid deduction is available to taxpayers who are subject to tax audit under section 44AB audit. The provisions of section 80 JJAA provide that the eligible taxpayer is entitled to obtain 30 percent additional employee cost incurred in the previous year, for three consecutive assessment years including assessment year relevant to the previous year in which such employment is provided. However, the above eligibility is subject to the condition that the aforesaid business should not be formed by splitting up or the reconstruction of an existing business as also it should not be an acquired business obtained by way of transfer from any other person or as result of any business organization.
Besides the above conditions, the taxpayer needs to also furnish a report duly certified by a Chartered Accountant in Form 10DA.
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