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DEDUCTION FOR PENALTY ON LOAN IN P AND L ACCOUNT
Whether penalty paid on loan , is deductible under p and l account?
Replies (2)
Quick Summary
Yes, it will be allowed as deduction u/s 37 provided the loan has been taken for business purpose. Penalties which are regarded as offence under any act or penalties paid for activities prohibited will not be allowed as deduction
| Originally posted by : Harshit Acharya | ||
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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
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