Interest on tds

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This query is : Resolved

Piyush Agrawal (Querist)

27 June 2013 Dear All,

can any body tell me that, is Interest paid in nature of late payment of TDS is been allowable as deduction U/S 37 or any other section of PGBP Head?

As per me it will be disallowed as interest paid under income tax act is disallowable u/s 37 but the client is arguing that interest on tds can not be disallowed as nowhere act has mentioned the word TDS, But according to me income tax act includes TDS.

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)

27 June 2013 Yes. Interest on late payment of TDS will be disallowed u/s.37. The word income tax include TDS- Income tax also

Piyush Agrawal

Piyush Agrawal (Querist)

28 June 2013 But Sir some professionals are saying that the interest on tds is compensatory in nature not penal, and only penal nature interest is disallowed in section 37.

So m in big confusion now.

ANKIT SHARMA

ANKIT SHARMA (Expert)

29 June 2013 Interest payable under the provisions of the Act is also covered - Payment of income-tax is not deductible as per section 40(a)(ii); hence, interest under sections 139, 215 and 217 which is to be regarded as accretion to tax, cannot also be allowed to be deducted - Assam Forest Products (P.) Ltd. v. CIT [1989] 180 ITR 478 (Gauhati).
Note : On the same principle, interest payable under sections 220(2), 234A, 234B or 234C is also not deductible.

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Piyush Agrawal

Piyush Agrawal (Querist)

30 June 2013 Thanx a lot,

now i am very clear about it.

Piyush Agrawal

Piyush Agrawal (Querist)

30 June 2013 Thanx a lot,

now i am very clear about it.

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