07 May 2010
No this expense would not be disallowed, provided the salary has not been given to any person outside India or not given to non-resident in India. Except these, you can deduct the expense.
07 May 2010
sec 40(a)(ia) has been amended. if you deducted TDS and depsoited it on or before the due date of filing of return then the expenditure will be allowed in same F.Y. So in your case exp will be allowed if you didn't file return before 7th May.
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