Can gst late fee be deducted from income tax?

Page no : 2

Ayush (Executive ) (6760 Points)
Replied 27 October 2023

Late fees in GST are a penalty for delayed filing of GST returns and are considered a business expense or a deductible expense for income tax purposes. Section 37(1) of the Income Tax Act states that deductions are allowed for business expenses only if they are incurred wholly and exclusively for the purpose of the business. In other words, the expenditure must be directly related to the business and not for personal or unrelated purposes.

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corporate genie (18 Points)
Replied 27 October 2023

No, GST late fees cannot be deducted from income tax. The late fees for Goods and Services Tax (GST) are distinct from income tax liabilities and cannot be set off or deducted against income tax payments. It's important to manage your GST payments and returns promptly to avoid incurring late fees and penalties.

If you have questions or need assistance with your GST compliance, you can consult experts like Corporate Genie, who can provide guidance and support to ensure you meet your GST obligations and avoid unnecessary penalties.