Section 43b
This query is : Resolved
18 September 2014
AS PER SECTION 43B
Notwithstanding anything contained in any other provision of this Act*, a deduction Sudame otherwise allowable under this Act in respect of—
a) any sum payable by the assessee by way of tax, duty, cess or fee, (by whatever name called, under any law for the time being in force);
My query is that whether "electricity expense" payable on balance sheet date but paid before filling income tax return is coverd under section 43B(a)and also shown in tax audit report.
Notwithstanding anything contained in any other provision of this Act*, a deduction Sudame otherwise allowable under this Act in respect of—
a) any sum payable by the assessee by way of tax, duty, cess or fee, (by whatever name called, under any law for the time being in force);
My query is that whether "electricity expense" payable on balance sheet date but paid before filling income tax return is coverd under section 43B(a)and also shown in tax audit report.
18 September 2014
Dear,
Section 43B : Certain expenses is deductible on payment basis :
1. Duty, tax cess or fee related to government or any other statutory due
exception :
payment in respect of aforesaid expenses is actually made on or before the due date of submission of return of income"
and Electricity expenses and provision of these type expenses is not comes under the provision of section 43B
Section 43B : Certain expenses is deductible on payment basis :
1. Duty, tax cess or fee related to government or any other statutory due
exception :
payment in respect of aforesaid expenses is actually made on or before the due date of submission of return of income"
and Electricity expenses and provision of these type expenses is not comes under the provision of section 43B
21 September 2014
DEAR SIR,
Please tell me one thing more,according to aforesaid section any fees related to government.so, electricity expense is also relates to government fees so why its not cover under provision of section 43b
Please tell me one thing more,according to aforesaid section any fees related to government.so, electricity expense is also relates to government fees so why its not cover under provision of section 43b
23 July 2025
Great question — and a common point of confusion!
⚖️ Section 43B – Overview
Section 43B of the Income Tax Act allows certain expenses to be claimed as deductions only on actual payment, regardless of the method of accounting (i.e., even if the assessee follows mercantile accounting). It applies to payments like:
Taxes (income tax, GST, etc.)
Duties
Cesses
Fees payable to the government
Employer contributions to PF/ESI, interest on loans, etc.
📌 Key clause (a):
“any sum payable by the assessee by way of tax, duty, cess or fee, by whatever name called, under any law for the time being in force.”
❓Now to your query: Is "Electricity Expense" covered under Section 43B(a)?
➡️ Short Answer: NO, electricity charges are NOT covered under Section 43B(a).
🔍 Why Not?
Let’s break it down:
Criteria Electricity Expense
✅ Is it a tax/duty/cess/fee? ❌ No. It is a payment for goods/services
✅ Is it a statutory levy under law like PF, GST, etc.? ❌ No. It’s a contractual liability
✅ Is it a government-imposed fee or regulatory payment? ❌ No. It is payment for supply of power, not a fee under any statute
✅ Is it paid to a government body? ✅ Sometimes (e.g., State Electricity Board), but still doesn’t make it a tax/fee
Just because the supplier is a government agency (like MSEB or BESCOM), it does not make the payment a tax, fee, or duty. It’s like paying BSNL for a phone — it's a service bill, not a government levy.
📊 Treatment in Tax Audit Report (Form 3CD)
Clause 26 of Form 3CD requires reporting only those liabilities covered under Section 43B.
So, electricity expense outstanding as on balance sheet date is not required to be reported under Clause 26.
✅ Conclusion
Electricity charges are not covered under Section 43B.
They are normal business expenses, allowable on accrual basis if mercantile system is followed.
No requirement to disclose them in the Tax Audit Report under Section 43B clause.
⚖️ Section 43B – Overview
Section 43B of the Income Tax Act allows certain expenses to be claimed as deductions only on actual payment, regardless of the method of accounting (i.e., even if the assessee follows mercantile accounting). It applies to payments like:
Taxes (income tax, GST, etc.)
Duties
Cesses
Fees payable to the government
Employer contributions to PF/ESI, interest on loans, etc.
📌 Key clause (a):
“any sum payable by the assessee by way of tax, duty, cess or fee, by whatever name called, under any law for the time being in force.”
❓Now to your query: Is "Electricity Expense" covered under Section 43B(a)?
➡️ Short Answer: NO, electricity charges are NOT covered under Section 43B(a).
🔍 Why Not?
Let’s break it down:
Criteria Electricity Expense
✅ Is it a tax/duty/cess/fee? ❌ No. It is a payment for goods/services
✅ Is it a statutory levy under law like PF, GST, etc.? ❌ No. It’s a contractual liability
✅ Is it a government-imposed fee or regulatory payment? ❌ No. It is payment for supply of power, not a fee under any statute
✅ Is it paid to a government body? ✅ Sometimes (e.g., State Electricity Board), but still doesn’t make it a tax/fee
Just because the supplier is a government agency (like MSEB or BESCOM), it does not make the payment a tax, fee, or duty. It’s like paying BSNL for a phone — it's a service bill, not a government levy.
📊 Treatment in Tax Audit Report (Form 3CD)
Clause 26 of Form 3CD requires reporting only those liabilities covered under Section 43B.
So, electricity expense outstanding as on balance sheet date is not required to be reported under Clause 26.
✅ Conclusion
Electricity charges are not covered under Section 43B.
They are normal business expenses, allowable on accrual basis if mercantile system is followed.
No requirement to disclose them in the Tax Audit Report under Section 43B clause.
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