Will the interest/penalty for late submission/deposition of TDS/ service tax/ Sales tax challans/returns be allowed as expenditure as per section 37?
Also provide the reference of circular/notification if any?
Thanks in Advance..
CA Rakesh (Professional) (47 Points)
23 March 2009Will the interest/penalty for late submission/deposition of TDS/ service tax/ Sales tax challans/returns be allowed as expenditure as per section 37?
Also provide the reference of circular/notification if any?
Thanks in Advance..
Abhinav Agarwal
(M.Com C.A SAP Consultant)
(814 Points)
Replied 23 March 2009
Sales Tax & Service Tax interest & Penalties are allowed as expenditure. But i am not very sure.
Rajesh Kumar
(Advocate- Tax)
(7806 Points)
Replied 23 March 2009
Interest is deductible, penalty is not deductible.
Although i feel penalty should be deductible as expenditure as it is a civil liability. But law has to be amended for that.
Ashish M
(Chartered Accountant)
(2731 Points)
Replied 24 March 2009
Penalty for infraction of any law Not deductible, except where penalty is in compensatory nature or for breach of agreement.(as there is breach of contract not infraction of law)
Interest under income/wealth tax act:-not deductible.
Interest under any other law:-if compensatory :allowed, if penal, not allowed.
CA Sakshi
(CA Practice)
(309 Points)
Replied 24 March 2009
Interest on delay of Sale tax is allowable expenditure. But not penalty
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