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Bonus provision sec 43B
Bonus provision made in 2017-18 for Rs. 100. Paid 80Rs in 2018-19 and Rs. 20 was reversed in 2018-19. will the reversal of bonus will be allowed as deduction from net profit for income tax in current year?
Replies (6)
As per sec 43b, deduction will be allowed for the year in which the expenses have been paid irrespective of the year in which the liability for such expense has been created. Therefore, for reversal of bonus amounting to Rs.20 is disallowed.
Okay. Can you tell me how to disclose this in tax audit clause 26(i)? The liability pre-existing as on the opening day of the previous year would be Rs. 100. amount paid would be Rs. 80 and amount unpaid should be disclosed as 20 or should be shown as 0?
It will be shown as amount unpaid of Rs.20/-
So there would always be a difference of Rs. 20 in the liability as per tax audit and the liability as per books?
Yes, because tax audit is a reporting requirement.
Okay. Thanks
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