Whether Interest paid for delayed payment of service tax is allowed as deduction?
Whether Interest paid for delayed payment of service tax is allowed as deduction?
no, fines and penalties for not complying any statutory provisions are nto allowable deductions
Late interest on taxes are of the nature of penalty and hence disallowable expenditure.
no all fines and penalties due to violation of law are dissalowed under the Income Tax Act, 1961
Payment of interest is not violation of any law. It is compliance of law.
Allowable expenditure.
Interest on service tax is compensatory. It is not penal. U cannot disallow the expenses U/s 37 saying that the expenditure is in contravention of law. Rather it is ensuring the statutory compliance.
| Originally posted by :Hemant Kumar | ||
| " | no all fines and penalties due to violation of law are dissalowed under the Income Tax Act, 1961 | " |
interest on service tax is diffrent from fine and penalties...it is incidental to business..and therefore allow.... if not agree yet thn tell me interest on sale tax is allowed or not...
it is allowed, there is a case law in ths regard lachmandas mathurada v CIT [2002]...and some more...
therefore if interest on sale tax is allowed thn interest on service tax is also allowed both are indirect taxes...
Dear All,
Please to state below;
Interest for failure to pay provident fund contributions is deductible - Where the assessee failed to pay the contribution under the provisions of the Employees’ Provident Funds Act to the concerned trust and consequently, it had to pay interest thereon, interest so paid by the assessee was not penalty and, therefore, was allowable as deduction - CIT v. Mysore Electrical Industries Ltd. [1992] 196 ITR 884 (Kar.)
IT IS AN ALLOWABLE EXP. IF ANY DELAY INTEREST IS PAID THEN IT IS CONSIDERED AS A PART OF THE EXP. AND IF ORIGINAL EXP IS ALLOWAED THEN DEP WILL ALSO BE ALLOWABLE
Whether penal interest paid to Bank by an assessing company can be dissallowed by an assessing officer? if no pls let me know the case laws?
I think the Interest on Delayed payment of the service Tax is not disallowed under the Act.
yes agreed
plz suggest in this regard " Assessee company has paid electricity bill of his employees residence for which Board resolution is also passed in the company authorising the company to pay electricity bills of employees residence, whether this expense is allowable to assessee company in income tax ?"
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