Payment of Interest on TDS and Service Tax of earlier years

As per sec 37 of Income tax act,1961, every expenditure related to business can be utilised in calculating taxable income.

Interest  or penalty on TDS is not a business expenditure. As TDS falls in Income Tax and Income tax falls in Personal expenses .That’s why No INTEREST or PENALTY are allowed same as for the Interest or penalty on Service Tax paid of earlier financial years .

when the Tax (TDS ,Advance tax or self Assessment Tax etc )is made then claim of these taxes can be made while filing the ITR .

However , claim of taxes  doesn’t include the Interest or any other penalty . So it is not permissible to avail such Interest and penalty under the income Tax irrespective of nature of Tax either as Service Tax or TDS .