11 April 2014
An individual assessee, who is running proprietary business, bought a four wheeler on loan. The vehicle fully used for official tours & trips. He paid EMI of the vehicle with late payment fee and bouncing charges.
Whether he can claim the interest paid on vehicle loan?
Whether he can account the late payment fee and bouncing charges as his expenses?
11 April 2014
Yes, interest paid on such vehicle loan shall claim as expenditure and lat payment fees also shall claim as expenditure and bouncing charges is not allowed as expenditure because of bouncing charges means like it as penalty for misuse the cheque/bank etc... and bouncing is due to the negligence of the assessee so as per my view bouncing charges are not eligible for expenditure deduction for income tax purpose(non allowable expenditure).
However if bounce is due to the negligence of the payee then it is the duty of the assessee to collect that charges for the payee because of it is due to their negligence.
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