Section 80JJAA grants eligible businesses a 90% deduction on additional employee cost — spread over three consecutive assessment years (30% per year). We help you structure, certify, and claim every rupee owed.
Section 80JJAA was inserted into the Income Tax Act with one purpose: to make formal employment cheaper for businesses that genuinely create it.
Where an assessee with business income — whose accounts are required to be audited under Section 44AB — hires additional eligible employees in a financial year, the law permits a deduction of 30% of the additional employee cost per year, allowable in the year of hiring and the two assessment years that follow — totalling a 90% deduction over the full three-year claim period.
It is not a cap; there is no upper limit. A company that adds ₹1 crore of qualifying payroll claims a ₹30 lakh deduction this year, ₹30 lakh the next, and ₹30 lakh the year after — a cumulative ₹90 lakh (90%) reduction in taxable income from a single year's hiring decision.
The mechanics, however, are precise. An "additional employee" is defined narrowly: monthly emoluments must not exceed ₹25,000, the employee must be employed for at least 240 days in the relevant year (150 days for apparel, footwear and leather), payment must flow through banking channels, and they must participate in a recognised provident fund. Get the definition wrong and the deduction collapses on assessment.
Our role is to keep that from happening — through clean working papers, correct identification of qualifying employees, a defensible Form 10DA, and complete audit-trail support if the AO comes calling.
The assessee must have income under "Profits and Gains from Business" and accounts subject to tax audit. Income from profession does not qualify.
The business must not be formed by splitting up or reconstructing an existing entity. Re-establishment, revival, or reconstruction of a discontinued business does, however, qualify.
Only employees whose monthly emoluments do not exceed ₹25,000 are counted as "additional employees" for 80JJAA purposes.
Each additional employee must be employed for at least 240 days during the previous year — relaxed to 150 days for businesses in apparel, footwear, or leather manufacturing.
The employee must contribute to, and the employer must remit to, a recognised provident fund. Casual or contract workers outside RPF do not qualify.
Emoluments must be paid via account payee cheque, demand draft, ECS, or other prescribed electronic mode. Cash payments to qualifying employees disqualify the cost.
Quick directional estimate. Final figures require working-paper validation.
Estimate assumes a constant additional-employee cost across the three-year claim period, full eligibility under § 80JJAA, and the selected effective tax rate. This figure is indicative; final entitlement depends on the actual count of employees who satisfy the 240-day, ₹25k/month, RPF, and non-cash payment conditions, and on a valid Form 10DA certified by a Chartered Accountant.
We review your tax audit status, business constitution, payroll structure, and prior-year claims to confirm whether — and to what extent — 80JJAA is available. A clear go/no-go in 48 hours.
From your payroll master, we filter for qualifying additional employees: monthly emoluments under ₹25,000, ≥240 (or 150) days of service, RPF contributors, paid via banking channels — and not employed in the prior year.
We calculate the additional employee cost as defined under the Section, excluding excluded items (employer PF/pension contributions, gratuity, leave encashment, terminal benefits) and net of disqualified payments.
A Chartered Accountant on our panel certifies and electronically furnishes Form 10DA before the due date of return filing — the indispensable precondition for the deduction.
We integrate the deduction into your ITR-3, ITR-5 or ITR-6 under Schedule VI-A, Part C, ensuring the claim survives e-filing validations and reconciles with the tax audit report (3CD) and Form 26AS.
We track the qualifying cohort across the remaining two assessment years, pre-empt the 240-day re-test where applicable, and file refreshed Form 10DAs — so the full 90% benefit lands.
80JJAA.com is the dedicated specialist practice of Wealthcore Capital Advisory — a corporate tax and financial advisory firm working with growth-stage and mid-market businesses across India.
We chose to publish a single-section site because Section 80JJAA is one of those provisions that quietly compounds: a hiring decision made today writes itself into a return three years from now. Get the documentation right and a manufacturing CFO recovers a meaningful share of payroll. Get it wrong and an assessment notice in year four undoes the savings.
Our work, accordingly, is unfussy: identify the qualifying cohort, compute the additional employee cost defensibly, certify Form 10DA, integrate the claim with the tax audit, and stay with the file across the full three-year arc.
Wealthcore Capital Advisory Private Limited is a corporate tax and financial advisory firm working with growth-stage and mid-market businesses across India. Our Section 80JJAA practice — accessible at 80jjaa.com — is the first and only dedicated specialist platform for this provision in India.
We are headquartered in Surat, Gujarat, and serve clients pan-India through our digital advisory model. Our team comprises Chartered Accountants and tax specialists with deep expertise in payroll-linked deductions, tax audit matters, and employment-linked incentives.
Section 80JJAA sits at the intersection of payroll, tax audit, and return filing — a space where generalist advisors often miss material deductions. Our practice is built around a single section, which means our identification protocols, working paper templates, and Form 10DA processes are optimised for precisely this claim.
Free directional calculation available until 30 June 2025 — we will assess your payroll and give you an indicative deduction figure at no charge. No obligation, no commitment.
We track the qualifying employee cohort across all three assessment years, file refreshed Form 10DAs annually, and defend the claim if an Assessing Officer raises queries — so you never lose the benefit you've earned.
Tell us about your hiring last year. We'll come back with a free directional estimate within two working days.
Yes. Section 80JJAA is one of the few Chapter VI-A deductions that survive the concessional tax regimes under Sections 115BAA and 115BAB. A company that has opted into 22% (or 15% for new manufacturing) continues to be entitled to the 30% annual deduction (90% cumulative over three years), provided the substantive conditions are met.
It is the total emoluments paid or payable to additional employees during the previous year. "Emoluments" excludes the employer's contribution to provident or pension funds, gratuity, leave encashment, retrenchment compensation, and lump-sum payments at superannuation or VRS.
For an existing business, additional employee cost is also treated as nil if the total number of employees has not increased over the previous year, or if the qualifying emoluments were paid otherwise than through banking channels.
Where an employee is hired in year one but does not complete 240 days (150 in apparel/footwear/leather) in that year, but does complete the threshold in year two, the deduction begins from year two and runs for three consecutive years. The Section was specifically amended to prevent the loss of benefit on near-year-end hires.
Yes. The deduction is available to any assessee with business income whose accounts are required to be audited under Section 44AB — including LLPs, partnership firms, and eligible proprietorships. Profession-only assessees do not qualify.
No. The CA-certified Form 10DA must be electronically furnished before the due date of filing the return. Failure to do so is a fatal defect: the deduction is disallowed even where substantive eligibility is uncontested.
The Assessing Officer typically tests three things: the cohort definition (whether each "additional employee" individually satisfies all conditions), the cost calculation (whether excluded items have been properly stripped out), and the documentary trail (Form 10DA, payroll registers, PF challans, banking proofs). A clean working file built at the time of filing is the single most reliable defence.
Yes — the Finance Act, 2016 broadened the Section beyond manufacturing. Service-sector businesses (IT, BFSI, logistics, retail, hospitality, etc.) qualify, subject to the same conditions. The narrower 150-day threshold remains specific to apparel, footwear, and leather manufacturing.
Yes. Each year's qualifying additional cohort generates an independent three-year deduction stream. A company hiring qualifying employees in three consecutive years can simultaneously be running three overlapping claims — provided the cohorts are tracked separately and Form 10DA is filed each year.