Summary
- The Supreme Court in Checkmate Services Pvt. Ltd. v. CIT clarified that employee contributions to welfare funds must be deposited by the statutory deadline to qualify for tax deductions under Section 36(1)(va).
- Delays of even one day past the due date result in permanent disallowance, as these funds are held in trust for employees, not as business expenses.
- Businesses are advised to segregate payroll timelines and prioritize employee statutory payments to avoid crippling tax liabilities.
- This ruling underscores the importance of strict compliance with deadlines, making reliance on ITR filing extensions a risky strategy for companies.
Join the discussion ā sign up to comment, upvote, and save articles.