Discuss the deductibility or otherwise of the following expenditure incurred by Sumit Agro Industries, while computing its business income for the year ended 31.03.2017. Contribution to the account of employees as per pe

The employer's contribution to the account of an employee under a pension scheme referred to in section 80CCD, is allowable as deduction under section 36(1)(iva) while computing business income only upto 10% of salary of the employee in the previous year. Accordingly, ₹29,20,000 would be allowed as deduction under section 36(1)(iva). Disallowance under section 40A(9) would be attracted only in respect of the amount in excess of 10% of salary. Therefore, ₹5,80,000 would be disallowed as per section 40(A)(9).