Yes, friends, how are you all? I am your friend C. H. Ray
Gupta.
We were discussing about tax deductions.
Mostly, we have covered all the sections.
There are some small sections remaining.
We will discuss about that today.
And we will do the last rites of this chapter today,
friends.
We will take its meaning today.
So, let's move ahead.
ATGGC.
If you remember, friends, ATGGC, which we had read in the
last lecture, we were discussing that if a company gives a
donation to a political party, the company gets a 100%
deduction.
Do you remember the point?
But, friends, this can also happen.
Because the political parties that are formed by the
government, these political parties can get money from
anywhere.
You all know, you have seen Rajnithi type movies.
Now, will they restrict that they will take money only from
the companies?
Suppose, there is an individual tomorrow.
There is an individual tomorrow.
If he wants to give money, for example, Akshay Kumar is an
individual.
Now, Akshay Kumar is an individual.
His company does not work.
Okay.
As an individual, his tax is deducted in the name of Akshay
Kumar.
Now, Akshay Kumar goes to a political party tomorrow.
You know who he is close to.
Who all he interviews.
Okay.
So, if he goes to that political party and wants to give a
donation, will the political party refuse?
No.
We will only take money from the companies.
You are an individual.
You tell me.
Does anyone do this?
A person is coming to give you money.
He is coming to give donation.
Will you refuse?
No.
You are not a company.
You are an individual.
So, we will not take money from you.
Sir, who doesn't like the coming money?
So, this is why the government has made another section,
that if there is an individual or another HUF type person,
and if he wants to give us a contribution, if he wants to
give a donation, then we will give him 100% deduction.
For example, let's take the example of Akki Bhai.
Our Canadian Kumar.
For example, he is Akki Bhai.
And he earns 100 crores per year.
Now, what he has to do is, if he has an income of 100
crores, or if he has to pay a tax of 100 crores,
I will reduce the income a little.
So, the person whom he went to interview, he spoke to him.
I am not taking names.
Look carefully.
He went to interview him.
And he asked, brother, do you have an income of 100 crores?
So, sir, tell me something.
So, the person whom he asked, he said,
So, the person whom he asked, he said, do one thing, in our
political party, you give some fund or some chanda.
So, he said, okay, brother, I will give.
So, how much did he give? 10 crores.
What was his income? 90 crores.
Now, how much will he pay this tax? 90 crores.
How much did he pay earlier?
Earlier, he was paying 100 crores.
Now, how much will he pay? 90 crores.
We have reduced 10 crores.
Reducing 10 crores means, we have given 100% deduction.
Whatever donation you give, 100% of that amount, you will
get a deduction.
This is an individual case.
We have done the company case in 80 GGB.
This is an individual case, friends.
Is the point clear?
Come, let's read it.
It is a very small point.
This section provides for deduction of any sum contributed
in the previous year by any person.
He is talking about any person.
Any person means individual.
HUF, partnership form, etc.
Okay? By any person to a political party or any electoral
trust.
However, no deduction shall be allowed in respect of any
sum contributed by way of cash.
Don't give any donation in number 2, friends.
Whatever donation you are giving, cut the cheque and give
it properly.
Don't give any donation through cash.
If you give through cash, then deduction will not be
allowed.
Whatever work you do, do it properly.
Cut the cheque and take the deduction.
Okay, sir?
Any problem?
Shall we proceed?
Shall we proceed, friends?
Come, friends.
There is a new section, 80 JJ AA.
80 JJ AA.
Friends, what happened?
If you remember, a few years ago, when Modi government came
to the market, he said that we will bring a concept of make
in India.
Whatever will happen, whatever production we will do,
whatever production we will do, where will we do it?
We will do it in India.
We will increase the production and manufacturing units of
India.
We will not import goods from China or any other country.
We will buy goods from local vendors, local manufacturers.
We will buy goods from them.
Okay, sir?
We will buy goods.
For example,
I am a local vendor or a local manufacturer who produces
goods.
Modi ji said that we will buy goods from you.
Obviously, if someone buys goods from me, my sales will
increase.
To increase sales,
I will have to produce more goods.
My production will increase.
For more production,
I need more employees.
Now, I will hire those employees and I will spend money on
their salary.
So, who is getting the money?
Who is getting the expense?
It is mine.
Who is getting the benefit?
It is the benefit of the country.
Sometimes, a person gets demotivated.
I am spending so much.
Sometimes, I don't have enough margin in my work to hire a
proper person and give him a salary.
But, I have not been able to achieve that much sales.
Or, my profit margin is a little less.
But, I am getting the expense.
Because, it is make in India.
I will have to increase my production.
So, the expense of extra employees is going out of my
pocket.
The person is demotivated.
He went to Mr.
Modi and said,
Mr. Modi, you are a blessing.
You are bringing such provisions.
People like us are facing problems because of that.
You told me to increase production.
But, to increase production,
I will have to spend money.
Now, I am paying that expense.
What about that?
So, Mr.
Modi said, good days are going to come.
It is our promise that we will bring good days.
So, do one thing.
Do one thing.
Don't worry.
Your additional employees,
What did I say?
Additional.
Additional means extra.
He said, look, the number of employees you have now, the
number of employees you have now, you are spending now.
Why are you asking us for deduction for that?
You are fine now.
But, when you will have extra employees for extra
production,
What did I say?
You will do extra production.
You will have extra employees for that.
So, what do we call that?
Additional employees.
So, what is the cost of additional employees?
What will you take for that?
Deduction.
You will take deduction for that.
For what?
For doing extra production.
You will have extra workers.
You will have extra employees.
You will put extra labour.
The salary you will give to that labour,
you will take deduction for that.
So that, people will get employment.
First number one point.
When you will do extra production, you know that you will
get deduction.
So, you will give job to those people.
What will happen with that?
Employment will increase automatically in the country.
You don't have to worry.
Because you will get deduction for their salary.
Look, one arrow has two marks.
People got employment for free.
You got deduction for the salary you are giving.
Employment is for those who get employment.
Production is for those who do production.
And for the country, benefit is the only benefit.
This is the point, friends.
You will get deduction for the additional employees.
How much will you get?
Sir, you will get 30% and you will get it for 3 years.
You will get 30% for additional employees.
And you will get it for 3 years.
Any problem?
No problem.
Sir, will you get only for additional employees?
Yes.
You will get additional extra employees for production.
You will get only for them.
The work you are doing now is going well.
There is no problem now.
You had a problem when you had to keep new employees.
No problem.
Now, in this additional employee, what all comes and what
all doesn't come.
I will give you an example and explain.
Try to understand this.
People don't understand this.
For example, you have 100 employees today.
You have 100 employees.
In the whole year, you kept 20 employees.
How many employees do you have in total? 120.
But in the whole year, 20 people left you.
These people didn't leave you.
The old employees left you.
They got a better offer from somewhere.
They left you there.
There were 100 employees in the starting.
For example, take a date.
There were 100 employees, you hired 20 more people because
your work is going to increase now because now make in
India has come, but 20 people left you in the middle
Now tell me, in this case, how many additional employees
will we consider in this case?
You hired 20 and left 20, will it make any difference to
your salary that you are giving?
There were 100, 20 came, increased, 20 also left
Will you get any additional employee cost? No
So should you get a deduction? In that case, you will not
get a deduction
Did you get extra employees?
There were 100 at the end of the year and there were only
100 at the end of the year, so where did the extra come?
Is there any extra?
Now look at the second case
In the second case, if you had 100 employees at the start,
and you hired 25 extra employees and 5 people left you in
the middle
Now how many employees are left with you? 120 Earlier there
were 100, compare it with this
Earlier there were 100 at the start of the year and how
many are left on 31st March? 120 How many additional
employees did you hire?
Did you hire 25? 25 or 20?
The answer is 20
You hired 20 extra employees
Why? Sir, I had hired 25 people at the start, I have a
letter of 25 people
You hired 25 people, your salary increased by 25
But 5 people left you in the middle
So what happened to your expenses?
It reduced
How many extra employees did you hire? 20 So how many extra
employees did you have? 20 Is the point clear?
During the year, how many people joined you?
And how many left you?
That figure will come at the end
Compare it with the opening figure
That is your additional figure
Compare it with this
How many were there at the start and how many were left at
the end?
Compare it with this
That is your additional employee cost
Is the point clear?
Let's go ahead and read the section
Is there any problem?
Is the point clear?
I am giving you the expenditure of additional employees
He is saying, where is the gross total income?
Of such an SSE on which 44A is also applied
Includes any profit gain from business?
Where is the gross total income of an SSE to whom 44A also
applies?
Includes any profit gain?
You will get a deduction of 30% 30% of additional employee
cost 30% of additional cost
Incurred in the course of such a business
You will get 30% of additional cost
You will not get the total cost
You will get the cost of all employees
Or you will get the additional cost?
You will get the additional cost
What is additional?
How many people joined you?
How many left you?
The net amount is your additional
Incurred in the course of business
In the previous year would be allowed for?
How many years will you get?
You will get for 3 years 3 assessment years
Including the assessment year
In which such employment is provided
There are some conditions
There will be a CA report
You should not have acquired any business by way of transfer
And business should not be formed by splitting up
Now what did he do about the additional employee?
Explained further
What is the meaning of additional employee?
Simple thing
He explained the meaning
There are some conditions
The cost of additional employee
We will consider it to be zero
Although you are paying something
But in some cases we will consider it to be zero
And if the additional employee cost
I consider it to be zero
Then there is no question of deduction
When am I deducting?
When I will spend something
In some cases I consider it to be zero
So when the government says
Additional employee cost is zero
In that case you do not get any deduction
He says if there is no increase in the number of employees
As I told you in the first example
There were 100 employees 20 came and 20 left
In the end something changed
Earlier also 100 people were working
And now also 100 people will work
So what will be considered in that case?
In that case also it will be considered
That you have not incurred any additional cost
There is no additional employee
So in that case you will not get any deduction
Emoluments are paid otherwise than by account pay check
If you give someone a salary in number 2
In number 2 there is no deduction
You will show that you have cash
You will say that I have employed 50,000 employees
You will take the deduction
Do you have any proof when you are paying in cash?
No
So how do you give their salaries?
You give their salaries by account pay check
By number 1
Electronic clearing system
Transfer money from RTGS
Any problem?
And what are the additional employees that do not come?
Which employees do not come?
Whose salary is above Rs.
25,000 per month
Someone's salary is Rs.
26,000 per month
So will he come in the definition of additional employee?
No Sir, why did the government do this?
Why did they keep Rs.
Our objective is that we are focusing on labourers
We are focusing on those workers who work in factories
We are focusing on those workers who do production
Obviously, their salary will not be below Rs.
So if someone's salary is above Rs.
For example, someone has hired an engineer and is paying Rs.
50,000 per month
So that engineer will not work in a factory
He will not work hard and do production
Our labourer or worker will do production
So we are focusing on them
This is the meaning of this point
An employee whose entire contribution is being paid by the
government
Or an employee who does not participate in the provident
fund
Or an employee who works less than 240 days in a year
If there are such conditions
Then what will be accepted?
There is no additional employee
If there is no additional employee
Then will there be a cost of additional employee?
No If there is no cost of additional employee
Then will there be a deduction?
No This is the point
Is it clear?
ATJJA
Whenever you study
First check if there is an additional employee or not
For the company
After that check
If he earns less than Rs.
The government is not paying his pension
Does it include money in the RPF or not?
Does he work more than 240 days or not?
Check all these conditions
After that check
Is the company's number increasing?
Earlier it was 100
Now it is 25
In this case
There will be 23 additional employees
Whatever salary you give them
That salary 30% deduction
For 3 years
Will be given
Is the point clear?
If you don't understand
Read it
This is what I have explained
Any problem?
Is there any problem?
Shall we move on?
This is an example
Shall we move on?
Next point
Is it clear?
Sir, these are very tough things
How will it be possible?
Income tax will be very easy
For this
Section