Interest on income tax is allowable or not?

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Querist : Anonymous

Querist : Anonymous (Querist)

18 October 2012 Please tel me interest on income tax is allowable for deduction or
not?if allowable then under which section?

mahak katyal

mahak katyal (Expert)
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18 October 2012 Interst on Income tax can never be allowed as deduction under head PGBP. it is totally disallowed as Income tax is!

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CA Pooja Agarwal

CA Pooja Agarwal (Expert)
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18 October 2012 ANY PAYMENT MADE UNDER INCOME TAX ACT /WEALTH TAX ACT IS NOT ALLOWED AS DEDUCTION IN COMPUTING THE TOTAL INCOME.

Interest for failure to pay advance tax - Interest paid under section 215 for failure to pay advance tax up to statutory percentage would not be allowable as business expenditure - Bharat Commerce & Industries Ltd. v. CIT [1998] 230 ITR 733/98 Taxman 151 (SC).

Interest for late payment of income-tax - Interest paid under section 220(2) for late payment of income-tax is not deductible as revenue expenditure - CIT v. Ashoka Mills Ltd. [1996] 88 Taxman 184/218 ITR 526 (Guj.)/CIT v. Raipur Manufacturing Co. Ltd. [1996] 135 CTR (Guj.) 248.
Interest for delayed filing of return is not deductible - It cannot be said that interest paid for delay in filing the return has any connection with the business of the assessee. If income-tax is not a permissible deduction under section 37, any interest payable for default committed by the assessee in discharging its statutory obligation under the Income-tax Act which is calculated with reference to the tax or income, cannot be allowed as a deduction - Orient General Industries Ltd. v. CIT [1994] 209 ITR 490 (Cal.).

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Querist : Anonymous

Querist : Anonymous (Querist)

18 October 2012 thank you so much for reply

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