Dedeuction of expenses related to prior period
This query is : Resolved
Sourbh Aggarwal
(Querist)
07 May 2016
Hi everyone,
can we take deduction of prior period of expenses in IT act?
can we take deduction of prior period of expenses in IT act?
CA VISHNU GAVKARE
(Expert)
09 May 2016
As per Income tax any expense related to business is allowed. This shall be for each financial year. Unlike Accounts there is no provision for Prior Period Item. But we can show this as Arised/Accrued in this year and claim as deduction.
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Sourbh Aggarwal
(Querist)
09 May 2016
sir,
there is no provision for Prior period items in Income Tax, it means we can take deduction of prior period items.
there is no provision for Prior period items in Income Tax, it means we can take deduction of prior period items.
CA VISHNU GAVKARE
(Expert)
09 May 2016
AO can disallow on the grounds it belongs to diff assessment year and may ask to revise that return and carry forward loss or take refund of excess tax. Better option is show a current year expense and claim the deduction.
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