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Late fees of gst and income tax
Is late fees,interest & penalty is business expenses or business owner expenses in both gst and income tax please elaborate
Replies (5)
Quick Summary
Late fees interest business exp. penalty Owner,s exp.
Both are coming under business expenses as I assume you are not asking for an individual Income tax filler.
Post details
Agree with Sandeep Jain
Late fees as business expenses:
• GST late fees (Sec 47) and interest (Sec 50): generally deductible as business expenses (compensatory, not penal, per many tribunals). GST penalties are penal and disallowed (Explanation 1 to Sec 37).
• Income-tax late fee (234F) and interest (234A/B/C): not deductible (income-tax is a tax on the owner's income, and its interest and fees are personal; Sec 40(a)(ii)).
• TDS late fee (234E): disallowed by many tribunals as connected with income-tax (Sec 40(a)(ii)). Some allowed it as compensatory.
• For a proprietor, income-tax related payments are drawings.
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