New Delhi: Seeking to give an impetus to job creation, the Narendra Modi government has relaxed the number of employment days criteria of seeking claim for 30 per cent deduction in wages by new workers to the leather and footwear industry also. As of now for seeking this claim, new workers need to be employed for more than 240 days in the year of employment. However in the apparel sector, this limit is relaxed to 150 days.
Aiming to boost its “Make In India” campaign, the NDA regime has extended this 150 days relaxed limit to the leather and footwear sector also.
While the reduced time limit will not only help ease the tax burden on employers, it will also attract greater workforce in the leather and footwear sector, which is among the major employers in the country, sources said.
To bring into effect this relaxation in the footwear sector, Section 80JJAA of the Income-Tax Act will be amended.
This amendment will come into effect from April 1, 2019, and will, accordingly, apply in relation to the assessment year 2019-20 and subsequent assessment years, official sources said.
The amendment, which forms part of Clause 27 of the Finance Bill whose focus is on incentivising employment generation, further aims to rationalise this deduction of 30 per cent by allowing the benefit for that new employee also who is employed for less than the minimum period during the first year, but continues to remain employed for the minimum period in subsequent year too.
