Claim deduction for the recruitment of new employee?

Hi,

I read about employers getting claim a deduction for the recruitment of new or additional employees. How do Tax Deduction under section 80JJAA work?

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Section 80JJAA is a facility for claiming a deduction for the recruitment of new or additional employees. The section has been made available in the Income Tax Act to encourage employers to recruit fresh employees on a periodic basis.

Additional employee means an employee who has been employed during the previous year and whose employment has the effect of increasing the total number o employees employed by the employer as on the last day of the preceding year, but does not include:

  • An employee whose total emoluments are more than Rs.25,000 per month.
  • An employee for whom the entire contribution is paid by the Government under the Employees Pension Scheme.
  • An employee who is employed for a period of less than 240 days during the previous years. In the case of apparel manufacturers, the minimum employment period is 150 days.
  • Any employee who does not participate in the recognised provident fund.
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