Is allowable expenditure of Interest on Vat ..?
This query is : Resolved
25 June 2011
Respected Experts please help me.... Our company (Pvt Limited) was paid huge amount as interest on Service Tax payble. Some one said that, Interest on Service Tax or Sales Tax and TDS is not allowable expenditure. Is it correct..? If yes, can you mention under which section of IT act is disallowing of the above payments. Please tell me... Thank u for all... RAJU.. 9705788628
CA PARAS BAFNA
(Expert)
26 June 2011
Interest on Service Tax and Sales Tax or Vat if is in compensatory in nature, means if payable due to the delay in depositing the amount of tax, is allowable as expenditure.
However, Interest on TDS is not allowable as TDS is a kind of income tax and income tax is not allowed as an expenditure.
However, Interest on TDS is not allowable as TDS is a kind of income tax and income tax is not allowed as an expenditure.
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