int on tds and vat allowable or not
This query is : Open
22 June 2016
hi experts
i want to know interest paid on delayed deposit of TDS and vat is allowable in IT act or not if it is not then under which section
thanx in advance
22 June 2016
Interest on TDS is levied under section 201(1A) of the Income tax Act,1961. The
said expenditure will not be allowed as a business expenditure.
Citation: Madras high court decision
in CIT V Chennai Properties & Investments Ltd reported in 239 ITR 435
said expenditure will not be allowed as a business expenditure.
Citation: Madras high court decision
in CIT V Chennai Properties & Investments Ltd reported in 239 ITR 435
22 June 2016
Interest on late payment of VAT is compensatory in nature and hence allowable as business expenditure.
In 'Lachmandas Mathuradas V. Commissioner of Income Tax' - 2008 -TMI - 6074 - Supreme Court the question before the apex court was whether interest paid on arrears of sales tax is penal or compensatory. The apex court held that the said amount was an allowable deduction since it was compensatory in nature.
Also refer the following article in this regard--
https://www.taxmanagementindia.com/visitor/detail_article.asp?ArticleID=788
In 'Lachmandas Mathuradas V. Commissioner of Income Tax' - 2008 -TMI - 6074 - Supreme Court the question before the apex court was whether interest paid on arrears of sales tax is penal or compensatory. The apex court held that the said amount was an allowable deduction since it was compensatory in nature.
Also refer the following article in this regard--
https://www.taxmanagementindia.com/visitor/detail_article.asp?ArticleID=788
Message likes :
1 times
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Late Filing Fee Waiver for Q1 Form 144 (Earlier 27Q) – Transition to Income-tax Act, 2025
- GST ITC as per notification 12/2023- central tax
- Urd purchase entry in tally prime
- Form 144 TDS Return Validation Error – Mandatory Fields
- Applicability of tax on invoice
- LLP audit and disclosure
- Capital gains in IT returns
- Form 144 TDS Return Validation error
- Advances to related party
- TDS- 2026-27 Q1 Correction
- Ito add credit side of bank
- Employee secondment
- Subject: Legal Remedy for Removal of Income Tax Demand for AY 2024–25 – Charitable Trust
- Expert Help Required for TDS Refund 100000 Through TRACES – AY 2022–23
- IMPORT PURCHASE ENTRY PASSED IN BOOKS OF ACCOUNT
- FAST DS 26 Undisclosed Foreign Asset Disclosure Scheme 2026
- Regime change
- Tally: Imported bank entries do not show up in manual reconciliation
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- FAST-DS 2026 Under Tax Law - No recourse or support for person declaring via this scheme?
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
