Interest expense claimed or not

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

25 September 2014 Dear sir,
late payment of vat, service tax ( interest paid) can the firm claim those interest considered as expense as per the income tax act

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
Follow

25 September 2014 no since they are in nature of payments for ur faults...disallowed.

Nikhil Kaushik

Nikhil Kaushik (Expert)
Follow

26 September 2014 they are allowed...interest being compensatory in nature is allowed as an expense. But penalties are not. there are several case laws in favor of assesses in this regard. you may refer https://www.caclubindia.com/experts/interest-on-late-payment-of-statutary-dues-40936.asp#.VCRnllcfgh4

Upgrade to CAclubindia Pro. Subscribe Now!