DEDUCTION FOR PENALTY ON LOAN IN P AND L ACCOUNT

Originally posted by : Harshit Acharya
	Whether penalty paid on loan , is deductible under p and l account?

Any expenditure (not being expenditure of the nature described in sections 30 to 36 and not being in the nature of capital expenditure or personal expenses of the assessee), laid out or expended wholly and exclusively for the purposes of the business or profession shall be allowed in computing the income chargeable under the head "Profits and gains of business or profession".

In Your Case Penalty is allowed