Disallowance under sec 40(a)

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Dear Sirs,

In our case advance amount paid to a contractor for carrying out labour contract. but fails to deduct TDS . Such amount is shown as advance under current assets in balance Sheet and not shown in Profit & loss account during the year. whethre it is required to disallow in computation

Replies (1)

The amount is liable to be disallowed. Further penal provisions relating to non-deduction of tax will be attracted. Advance to contractor is one form of payment of expenses to contractor which will be adjusted against bills.


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