Deduction in p and l

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404 Points Posted on 11 July 2020
Whether amount paid for violating traffic and having paid a traffic challan , be deducted under p and l under s.37?
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On 11 July 2020 at 11:25 Report
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This discussion clarifies whether payments made for traffic violations, such as challans, can be deducted under Section 37 of the P&L. The consensus is that such penalties are not allowable expenses. This is because payments for offences or illegal acts, which are not compensatory, are explicitly disallowed as deductions according to Section 37(1) and its accompanying explanation.

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Chartered Accountant
12739 Points Posted on 11 July 2020

NO , NOT ALLOWED 

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On 11 July 2020 at 11:29
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404 Points Posted on 11 July 2020
Please can you give reference to some section for proving this.
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On 11 July 2020 at 11:31
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Practice
3235 Points Posted on 11 July 2020
Penalty / Fine for Traffic Violation not allowable

payments made for any purpose which is an offence or which is prohibited by law and which are not compensatory in nature cannot be allowed as a deduction u/s.37(1) read with Explanation thereto.
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On 11 July 2020 at 12:28

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