What is the treatment of fines and penalties in the books of accounts? Can fines and penalties be recognized as expenses with regard to tax compliance?
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Treatment of fines & penalties in books of accounts
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Fines and penalties are not given deduction as business expenses for calculating profit as per IT Act.
They are to be added back to profits.
They are Dr. to Profit and loss a/c but IT Act adds it back to arrive at profits and tax compliance.
- Ashi(www.meritranker.com)
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