Sec 40 (a) (ia)

Sir As the provisions of Sec 40 (a) (ia) are applicable only to items covered by Sec 30 to 38 and the profit us 28 is arrived after allowing the direct costs expenditure us 145 on the basis of books regularly maintained by the Assesse - Whether direct costs expenditure incurred without TDS are disallowable us 40 (a) (ia)?

Direct cost expenditure i.e. expenses incurred to earn that income such as in the case of an advertising firm engaged in hoarding display incurred display charges such as hoarding rental, ground rent, Flex fitting charges, Display charges made by sub contractors etc.

 

 

Replies (2)

Direct Expenses are allowed as expenditure under sections 30 - 38 only & not under 145. Section 145 gives only the 2 options for following the method of accounting. Hence the provisions of section 41(a)(ia) are applicable to direct expenses also & if tax is not deducted then (if applicable), then such exp must be disallowed.

agree with Divya

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