Considering the growth of the economy, the expectation from the Government in the current year's #budget was to create more employment opportunities in various sectors such as infrastructure, manufacturing, etc., thereby, resulting in generation of income.
Towards this end, the #FinanceBill, 2016,has proposed to incentivize the employers by expanding and liberalising the scope of employment generation incentive available under Section 80JJAA of the Income-tax Act, 1961 ('the Act').
Prior to the proposed amendment, benefit under Section 80JJAA of the Act was available only to employers engaged in the manufacture of goods, subject to the fulfilment of specified conditions such as new regular workmen employed during the previous year in excess of 50 workmen for an existing factory, increase in the number of regular workmen must be by atleast 10% of the existing number of workmen as on the last day of the preceding year.
There has been litigation in the recent past on whether the deduction would be available only to manufacturing sector or would other sectors also be eligible for the same There has been a Tribunal decision wherein, it has been held that even an IT and ITeS Company would be eligible to claim deduction under Section 80JJAA of the Act.
Addressing the above issue and also for generating new employment opportunities, the Finance Minister has proposed to amend the eligibility criteria for deduction under Section 80JJAA of the Act, thereby widening the scope to include all assessees liable to tax audit and not only those engaged in the manufacturing activity.
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