While assing my IT return of A-Y 2009-10 the labour charges paid by me (Debited in P/L) was disallowed( due to non deduction of TDS) by IT deptt. and they added back the expenditure and the penal tax impose on me is Rs 45,00,000/-. Now my question is how can i adjust the penal tax paid what so ever with my current year IT return. can i claim those labour payment in my current year P/L?
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U/s 40a1(a) of the income tax act
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You do not need to show it in the current year P&L, as it was already debited in the P&L for 2008-09. While calculating the tax liability for the A.Y. relevant to the F.Y. in whihc the payment, deduct the labour charges paid from your business income. the penal tax omposed cannot be allowed as a deduction as it an penalty impsed for non-compliance of TDS provisions.
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