Rule 104 : Initial contributions
(Part XIV : Approved Gratuity Funds)
The amount to be allowed as a deduction on account of an initial contribution which an employer may make in respect of the past services of an employee admitted to the benefits of a fund shall not exceed 8 and 1/3 per cent (8.33%) of the employee's salary for each year of his past service with the employer.
Reference/Source: Check at Income Tax site for latest version of the Rules - link
This page was last updated on 17th October 2016.