CA Fees deduction for non audit case allowed?

Hello,

For my non audit FnO return my CA has prepared BS and PnL and filed the return. He has charged an amount for the same and deducted from my PnL as professional charges.

My queries are:

  1. Even if I will pay him in September this year, can he deduct the same from my previous years profit?
  2. He has not put his name in prepared by box, he put my name as self. So it doesn't show that he has prepared and filed the return except my email communications. Is the deduction still allowed?
  3. In case of non audit cases is Professional Charges allowed? If yes under what head? Tax compliance?
Replies (2)
Quick Summary
This discussion clarifies whether CA fees for non-audit cases, specifically for FnO (Futures and Options) returns, are deductible. The consensus is that professional charges for preparing financial statements and filing tax returns are fully allowable as business expenses under the Profits and Gains from Business or Profession (PGBP) head. Key requirements include having a proper tax invoice and payment trail, and importantly, the expense must be claimed in the year it pertains to, not when it's paid. It's also confirmed that the CA's signature in the 'prepared by' section is not essential for deductibility, as long as the invoice and payment records are in order.

  • Professional Charges Allowability: Yes, professional fees paid for accounting and tax filing related to FnO business income are fully allowed under PGBP as business expenses.

  • Documentation: Ensure you have a proper tax invoice and payment trail from the CA to substantiate the expense, regardless of whether the utility metadata shows "self".

  • Timing: Expenses are claimed against the profits of the year they pertain to/are incurred, rather than arbitrarily shifting them to adjust a previous year's finalized profits.

CA fees paid to prepare financial statements and file ITR for FnO business are allowable as a business expense under Profits and Gains from Business or Profession.

Key points:
- Deduction allowed under Section 131 of the Income Tax Act, 2025 as a legitimate business expense
- Does not matter whether the CA signed the PREPARED BY section. Invoice and payment trail counts
- Claim the expense in the year it pertains to, not when paid. FY 2025-26 CA fees in AY 2026-27 ITR
- Allowed even in non-audit cases. Section 44AB audit threshold is about turnover, not deductibility

For FnO returns, ITR-3 requires a detailed P&L schedule so documenting expenses correctly avoids scrutiny. This [FnO and intraday trading tax guide](https://taxgarden.in/blog/fno-intraday-trading-tax-itr-audit-india) has the full list of deductible trading expenses.

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