Can expense be allowed if tax is deducted in next year

521 views 1 replies

Hi

Pls help me sort out this

If a company has not deducted tax on an expense/payment claiming that no TDS is applicable, in year 1 and later on in year 2 it has changed its view & wants to pay the tax liability for expense of year 1, do the company need to file in a revised return for year 1, claiming the said expense as disallowable for year 1?

Also how should the same be disclosed in the tax audit for year 2 in the following cases

  1. the tax auditor had allowed the expense in year 1 & the same was also claimed accordingly in the return filed by the company.
  2. the tax auditor had disallowed the expense in year 1 & but in the return the expense was claimed as allowable
  3. the tax auditor had disallowed the expense in year 1 & the same was also disallowed accordingly in the return filed by the company.
Replies (1)

Ideally you should file a revised return provided the original return was filed in time, ie not a belated return.

There is no prescribed law that after tax audit or signing of 3CD the assessee cannot change income computation. It is the assessee's call how they will treat the items of expense/income for taxation offering purpose.

Other views please.

Regards,

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