Diversion tax under section 43b

Will diversion tax be allowed as deduction on payment basis under section 43B, if accumulated diversion tax for last 3 years is paid in current year.

Replies (3)
Yes all tax payments are allowed
Further if tax are Dr to p & l acc the same may be added back

Any kind of tax fall under sec 43B. So same with the diversion tax. Hence 43B will be applicable on the divesrsion tax also and deduction will be claimed on the paid basis.

Abstract from the sec 43B as follows:

Notwithstanding anything contained in any other provision of this Act, a deduction otherwise allowable under this Act in respect of—

[(a) any sum payable by the assessee by way of tax, duty, cess or fee, by whatever name called, under any law for the time being in force

shall be allowed (irrespective of the previous year in which the liability to pay such sum was incurred by the assessee according to the method of accounting regularly employed by him) only in computing the income referred to in section 28 of that previous year in which such sum is actually paid by him :

Provided that nothing contained in this section shall apply in relation to any sum, which is actually paid by the assessee on or before the due date applicable in his case for furnishing the return of income under sub-section (1) of section 139 in respect of the previous year in which the liability to pay such sum was incurred as aforesaid and the evidence of such payment is furnished by the assessee along with such return.

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