TDS on Interest on loan from NBFC relating to prior period

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This discussion addresses a scenario where interest on an NBFC loan and its corresponding TDS were missed in the FY 20-21 Profit and Loss account. The user inquired if TDS could be deducted in the current year and the expense claimed. Experts clarified that while expenses are allowed in the year of subsequent TDS deduction under Section 40, claiming it for a preceding year is not possible if it wasn't declared as due at that time.

Jaya Kumari

Jaya Kumari (Querist)

22 June 2023 Hello Experts,

Following is the case scenario:
Interest on Loan from NBFC was mistakenly not entered in Profit and Loss account for the FY 20-21, Also TDS was not deducted.
Now, if in the current year, if we decide to deduct TDS, can we claim the expenditure in profit and loss account?
I know that as per section 40, if TDS is deducted subsequently, the expense is allowed in that subsequent year. But in my case we didn't disallow the expenditure through Tax Audit report, but mistakenly didnt even debited it in PL in the first place. Can we still the claim the deduction?