Provisions for Amortization of Expenditure in case of Amalgamation / De-merger (Section 35DD)

1. Applicability: The assessee should be an Indian Company.
2. Deduction: Expenditure incurred for the purpose of amalgamation or de-merger will be allowed as a deduction in 5 equal installments commencing from the previous year in which amalgamation or de-merger took place. Such expenditure will not be allowed as deduction under any other provisions of the Act.
3. Maximum limit: There is no maximum ceiling limit for expenditure.

DEDUCTION ON PAYMENTS TO EMPLOYEES IN CONNECTION WITH ‘VRS’ IN THE HANDS OF EMPLOYER (SECTION 35DDA)

1. Applicability: All assesses
2. Conditions:
   1. The retirement should be in accordance with the scheme of voluntary retirement.
   2. The payment can be made in any year, each such payment independently being admissible for amortization over a period of five years.
3. Deduction: The amount of  expenditure so paid will be allowed in 5 equal installments commencing from the previous year in which such payment / part payment was made.
4. Business Re-organization: In the following cases of business reorganization, the deduction will be allowed as under

5. No other deduction: No deduction will be available under any other section in respect of expenditure incurred under this section.