With effect form 1-4-2000, no assessee shall be allowed a deduction in respect of any provisions made for the payment of Gratuity to his employees on their retirement or on termination of their employment for any reason.
This provision shall not be applicable in the following cases :
(i) When the assessee makes a provision for any contribution towards an approved gratuity fund; or
(ii) When he makes a provision for the purposes of payment of any gratuity that has become payable during the previous year;
In case any deduction is claimed under this clause no deduction will be allowed when amount is actually paid.
Contribution to Funds, Trusts, Companies etc. [Section 40A(9)].
No deduction shall be allowed in respect of any sum paid by the assessee as an employer towards the setting up or formation of or as contribution to any fund, trust, company, association of persons, body of individuals or a society or other institution for any purpose except the contribution paid u/s 36(i), (iv) or (v).