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Disallowance under Sec 43 B (Income Tax)

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This query is : Resolved



( Author )
06 March 2009

Whether Professional Tax deducted from employees is covered under Section 43 B of Income Tax Act, 1961 for disallowance if not deposited by employer before filing of ITR?


CA LOKESH KASAT, FCA ACS CWA

( Expert )
06 March 2009

Yes. Section 43B(a) Disallowed it


C A GROUP COACHING

( Expert )
06 March 2009

PROFESSIONAL TAX BEING STATUTORY IN NATURE GETS INCLUDED UNDER THE PROVISION OF SEC 43B


CA Nitin Wadhwani

( Expert )
07 March 2009

No.
Professional tax deducted by employer from employee's salary will be covered u/s 36(1)(va) and has to be remitted before due date of that statute.


Nishant Sinha

( Author )
07 March 2009

Section 43 B states that certain expenses are deductible on payment basis. Professional Tax is not an expense and where the assesssee has neither claimed a deduction nor any charge was made to the profit & loss account, no disallowance could be made by taking course to the balance sheet of the assessee.

The deduction for payment of employees' contribution towards any welfare of such employees can be claimed by virtue of Section 36(1)(va) according to which it is deductible if such sum is credited by the assessee to employee's account in the relevant fund under any Act or rule or otherwise on or before the "due date". But Professional tax is not classified as a contribution towards the welfare fund for employees.

Please provide any judgement case for your supporting.


CA Nitin Wadhwani

( Expert )
07 March 2009

Yes.
But if PT deducted and not paid, then it can be treated as income u/s 2(24)(x).


MAHENDRA KUMAR BAGRECHA

( Expert )
18 June 2011

Hi,

In continuation with the last reply, Section 2(24)(x) says "any sum payable under PF or ESI of superannuation fund or any fund for welfare of employees", PT deduction from employee salary and payable to state govt will not be utilized for welfare of employees as per my understanding and hence PT is not covered u/s 43B


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