150% deduction in tax computation on skill development expenses
Updated: Jul 18, 2013 06:24:01pm
New Delhi, Jul 18 (KNN) Companies investing in skill development of new employees will be eligible for a tax incentive equivalent to 150 per cent deduction.
The decision announced by the Finance Ministry today is aimed at promoting skill development and is in sync with the National Manufacturing Policy.
However, the companies seeking tax incentives on this count will have to set up training facilities in their premises other than their usual operations.
“A company engaged in the business of manufacturing any article or thing (other than alcoholic spirits and tobacco products) or engaged in providing specified services, as listed under Rule 6AAH, shall be eligible for weighted deduction of the expenditure incurred on skill development,” said an official notification.
National Skill Development Agency (NSDA) will be the nodal agency to scrutinize the applications made by eligible companies. The Central Board of Direct Taxes (CBDT) shall notify the skill development project based on the recommendation of NSDA in this regard.
Further, all expenses (not being expenditure in the nature of cost of any land or building), incurred wholly and exclusively for undertaking a notified skill development project shall be eligible for deduction under section 35CCD, except the expenditure which is reimbursed or reimbursable to the company by any person, whether directly or indirectly.
The company undertaking skill development project shall be required to maintain separate books of account of the project notified under section 35CCD and get such books of account audited.
It is intended that the skill development project shall provide training to potential employees or newly recruited employees. Skill development of existing employees of the company shall not be eligible for notification under section 35CCD, if the training of such employees commences after six months of their recruitment.
The decision is certainly timely as a large number of manufacturing segments are facing skill shortage at different levels of shop floor production. (KNN)
The decision announced by the Finance Ministry today is aimed at promoting skill development and is in sync with the National Manufacturing Policy.
However, the companies seeking tax incentives on this count will have to set up training facilities in their premises other than their usual operations.
“A company engaged in the business of manufacturing any article or thing (other than alcoholic spirits and tobacco products) or engaged in providing specified services, as listed under Rule 6AAH, shall be eligible for weighted deduction of the expenditure incurred on skill development,” said an official notification.
National Skill Development Agency (NSDA) will be the nodal agency to scrutinize the applications made by eligible companies. The Central Board of Direct Taxes (CBDT) shall notify the skill development project based on the recommendation of NSDA in this regard.
Further, all expenses (not being expenditure in the nature of cost of any land or building), incurred wholly and exclusively for undertaking a notified skill development project shall be eligible for deduction under section 35CCD, except the expenditure which is reimbursed or reimbursable to the company by any person, whether directly or indirectly.
The company undertaking skill development project shall be required to maintain separate books of account of the project notified under section 35CCD and get such books of account audited.
It is intended that the skill development project shall provide training to potential employees or newly recruited employees. Skill development of existing employees of the company shall not be eligible for notification under section 35CCD, if the training of such employees commences after six months of their recruitment.
The decision is certainly timely as a large number of manufacturing segments are facing skill shortage at different levels of shop floor production. (KNN)
Loading...
