Rahul (Chartered Accountnat CS) (1580 Points)
24 March 2012Plwase tell me weather the following are allowed or disallowed expenditure under the head Business andf profesison
1. Provision for Indirect Taxes
2. Provision for direct taxes
3. Interest on late payment of Indirect Taxes
4 Interest on late payment of Direct Taxes
5 Penalty on non payment of Indirect taxes
6 Penalty on non payment of Direct taxes
Palash Gupta
(Student...Hoping to pass Inter)
(892 Points)
Replied 25 March 2012
CA Ankit Totla
(Practicing Chartered Accountant)
(469 Points)
Replied 26 March 2012
Firstly, any provisions or interest or payments made for direct taxes are not deductible.
Secondly, for indirect taxes, provisions are not allowed, interest on late payments are allowed and penalty which is compensatory in nature is allowed whereas penalty which is penal in nature is disallowed.
Giridhar S Karandikar
(Team Lead)
(7543 Points)
Replied 27 March 2012
Provision for indirect taxes i.e. sales tax, excise duty, service tax etc..are allowed in the A.Y. relevant to the P.Y., provided the payment is being made on or before the due date of furnishing the retunr of Invoice u/s 139(1). However if the pymt is made after furnishing the return then the deduction is allowed in the A.Y. relevant to the P.Y. in whihc the payment is made.. also interest on late payment of indirect taxes is allowed. However penal charges are not allowed in case of IDT.
Any provision, interest, penalty in case of Direct Taxes is disallowed under the I-T Act.
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