Prior Period Income tax

Does Prior Period Expense eligible for income tax deduction?

Thanks,
Replies (4)
Quick Summary
This discussion clarifies whether prior period expenses can be claimed as an income tax deduction. Generally, these expenses are allowable if a mistake is rectified in the current year. However, tax authorities may disallow the claim if they suspect intentional misrepresentation to reduce tax liability, treating it as unexplained expenditure or assessing it in the year it originally occurred. Proper explanation to auditors is crucial, though they may still report such items.

Priror period expenses allowed as deduction and can claim expenditure at the year of founded the mistake etc.... it is allowable. In case at the time of scrutiny assessment if the AO doesn't satisfied the facts and reasons of mistake and it seems make with intention to divert or decrease income tax payable then he may disallow it as un-explained expenditure or may do assessment after considering such expenses for the year for which they actually related.

Even I read this, but how auditor accepts this forget abt AO

Prior period expenses is eligible for deduction but AO after making assessment may disallow if claim is not in proper provision
You have to Give Proper explanation to auditor about the expenditure, he has to accept but he has the power to report such expenditures in his report .

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
02 November 2026
Audit Executive

SRJP & Co LLP

Kochi

CA Inter

View Details
Company
ARTICLESHIP 20 October 2026
CA ARTICLE

AMKN & CO

Noida

CA Inter

View Details
Company
12 October 2026
Finance

I-Genext Consulting Private Limited

New Delhi

CA

View Details
Company
Featured 27 October 2026
semi-qualified CA

Saini Pati Shah & Co LLP, Chartered Accountants

Mumbai

CA Final

View Details
Company
ARTICLESHIP 28 October 2026
Article assistants

Shyam S Gupta and Company

New Delhi

CA Inter

View Details
Company
ARTICLESHIP 23 October 2026
CA Articleship / Article Assistant

M N Rao & Associates LLP

Vijayawada

CA Inter

View Details
Company
19 October 2026
Accountant

Jari Saree Center

New Delhi

Others

View Details
Company
ARTICLESHIP 29 October 2026
Article Assistant (CA Inter / CMA Inter) - Thrissur

Varma Raja & Associates

Thrissur

CA Inter

View Details