Payment of Interest due to delay in taxes

Dear all;

I want to know In the computation of total income of an assessee is interest paid  towards late payment of any tax (direct or indirect) allowable expenditure or not? As far as interest on delay payment of Income tax, TDS or FBT is concern these are not allowable expenditure but I want to know about Indirect taxes (VAT, CST, Service Tax etc)

Thanks...

Replies (4)
any type of intesest paid on lated payment (whether under income tax or any type of indirect tax act) are not allowed as deduction under computation of total income under income tax act.

Keep one thing in mind as a thumb rule "ANY KIND OF PENALTY OR FINE IS DIALLOWED"

truely said. any type of expenses which is incurred for infringement of law. is not allowable expenses.

Swohra ,

       Since Service Tax , Sales Tax (Vat ) are deductible expenditures , the interest paid on them is also deductible .

Regarding sales tax, interest on late payment of that tax is allowable since sales or purchase is a deductible item(104 ITR 783, 201 ITR 303)  just remember as a thumb rule - If the expense is allowed , how can the interest on that expense be disallowed .

I dont agree with the above comments .

 

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
13 August 2026
Chartered Accountant (FP&A)

Client of Trellis Consulting

Gurgaon

CA

View Details
Company
08 September 2026
Semi-Qualified Assitant

Subrahmanyam & Sivudu CA Firm

Hyderabad

CA Inter

View Details
Company
08 September 2026
Audit Executive

Thammana & Associates

Srikakulam

B.Com

View Details
Company
25 August 2026
Senior Accountant

MG Associates

New Delhi

CA Inter

View Details
Company
18 August 2026
CA Semi Qualifies

Goyanka and Associates

New Delhi

CA Inter

View Details
Company
21 August 2026
Finance Manager

Resollect Technologies Pvt Ltd

Mumbai

CA

View Details
Company
ARTICLESHIP 07 September 2026
CA Articles

Kothari Jain Patil & Chartered Accountants

Pune

CA Inter

View Details
Company
ARTICLESHIP 24 August 2026
Chartered Accountant Articles

Rohit KC Jain & Co

New Delhi

CA Inter

View Details