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Expenditure deductible?

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Querist : Anonymous

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Querist : Anonymous (Querist)
06 July 2010 Whether service tax paid on services purchased is an allowable expense under IT Act? plz give sec ref..

how abt interest on TDS and Service tax..whether they are allowable?
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Akhil Agrawal

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Akhil Agrawal (Expert)
06 July 2010 The Service Tax Paid on services is an allowable exp as per sec 37(1).

The service tax paid by the assessee will never form part of the P&L a/c as it is just collected & deposited - so it just is a BS item.

However the int for late deposit of Service tax will be allowed if it is of compensatory nature otherwise not. also penalty will always b disallowed

Any Int/ penalty under Direct tax laws is not allowed - hence int on TDS not allowed.
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Aditya Maheshwari

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Aditya Maheshwari (Expert)
06 July 2010 Agree with above.

Further interest paid under indirect tax is allowable but not for interest paid on direct taxes.
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Aditya Maheshwari

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Aditya Maheshwari (Expert)
06 July 2010 Agree with above.

Further interest paid under indirect tax is allowable but not for interest paid on direct taxes.
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