Deductions in computing profits and gains from pgbp read mo

It depends on the method of accounting followed by you i.e. whether it is on cash basis or mercantile basis.

Case 1 (Cash Basis) - Deduction for A.Y. 2014-15 Rs.58,000/- (18000+40000) for A.Y. 15-16 Rs.42,000/-

Case 1 (Mercantile Basis) - Deduction for A.Y. 2014-15 Rs. 1,00,000/- for A.Y.15-16 - No Deduction

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Case 2 (Cash Basis) - Deduction for A.Y. 2014-15 Rs.58,000/- for A.Y. 2015-16 - Rs.21,000/- (paid through a/c payee chq on 5/5/14) and  in respect of Rs.21,000 paid on 5/4/14 no deduction would be available since you have paid cash payment exceeding Rs.20,000/- u/s 40A(3)

Case 2 (Mercantile Basis) - Deduction for A.Y. 14-15 Rs.1,00,000/- for A.Y. 15-16 - Rs.21,000/- (paid through a/c payee chq on 5/5/14) and  in respect of Rs.21,000 paid on 5/4/14 no deduction would be available since you have paid cash payment exceeding Rs.20,000/- u/s 40A(3) & such amount i.e. Rs. 21,000/- i.e paid on 5/4/14 would be added back to your income since you had already claimed deduction in respect of such amount in A.Y.14-15.