Interest paid on TDS

This discussion clarifies whether interest paid on delayed TDS (Tax Deducted at Source) deposits is an allowable business expense. The consensus, supported by a ruling from ITAT Kolkata in the case of DCIT Vs M/s. Rungta Mines Ltd, is that such interest is indeed allowable. This is because the TDS amount represents the tax liability of a third party, not the assessee's own tax, making the interest paid on its delayed deposit a legitimate business expense under Section 37(1).