Tax? urgent

Others 590 views 4 replies

Rahul

Chartered Accountnat CS

1585 Points Posted on 24 March 2012

Plwase tell me weather the following are allowed or disallowed expenditure under the head Business andf profesison

1. Provision for Indirect Taxes

2. Provision for direct taxes

3. Interest on late payment of Indirect Taxes

4 Interest on late payment of Direct Taxes

5 Penalty on non payment of Indirect taxes

6 Penalty on non payment of Direct taxes

Replies (4)

Palash Gupta

Student...Hoping to pass Inter

892 Points Posted on 25 March 2012

all are dissalowed except no. 3...as no provision iz alowd to b deductd nd ny interest nd penalty on direct taxes are also nt allowed bcoz these are nt cnsdrd as busines expenses!!

nitin suvarna

C.A FINAL

828 Points Posted on 25 March 2012

correctly said.......

CA Ankit Totla

Practicing Chartered Accountant

469 Points Posted on 26 March 2012

Firstly, any provisions or interest or payments made for direct taxes are not deductible.

Secondly, for indirect taxes, provisions are not allowed, interest on late payments are allowed and penalty which is compensatory in nature is allowed whereas penalty which is penal in nature is disallowed.

Giridhar S Karandikar

Team Lead

7558 Points Posted on 27 March 2012

Provision for indirect taxes i.e. sales tax, excise duty, service tax etc..are allowed in the A.Y. relevant to the P.Y., provided the payment is being made on or before the due date of furnishing the retunr of Invoice u/s 139(1). However if the pymt is made after furnishing the return then the deduction is allowed in the A.Y. relevant to the P.Y. in whihc the payment is made.. also interest on late payment of indirect taxes is allowed. However penal charges are not allowed in case of IDT.

Any provision, interest, penalty in case of Direct Taxes is disallowed under the I-T Act.