INTEREST ON TDS allowability as expense

Interest towards the late payment of TDS is not allwoed as expense....

Interest on TDS is not a allowable enpenditure.

Infact any type of interest piad under Income tax Act 1961 is not allowable.

Refer Sec 40(a) or 37

Interest on TDS is treated as penal in nature. U cant claim the same

 Do you mean late filing penalty on TDS??

Dude, As far as I know, all types of penalties, interest for late payments were not allowed as an expense.

Simple rule is that "all expenses incurred for the business/profession" can be shown as deduction

extra expenses incurred for business/prof. due to the mnanagement delay that is not allowed as an expense..

For ex:  Insurance policy remium - Rs.1000  late payment fee Rs.150.

Total premium paid is Rs.1150

While computation of Income of individual/Buss./Prof.  only Rs1000 can be shown as a deduction but not Rs.1150

Warm Regards

-Ram 

 NOT ALLOW

 Payment of income-tax is not deductible as per section 40(a)(ii); hence, interest under sections 139, 215 and 217 which is to be regarded as accretion to tax, cannot also be allowed to be deducted - Assam Forest Products (P.) Ltd. v. CIT [1989] 180 ITR 478 (Gauhati).

Note : On the same principle, interest payable under sections 220(2), 234A, 234B or 234C is also not deductible

section 40(a)(ii) disallows only tax on profits and gains of business

 Interest on TDS will not be allowed as expense. 

Dear,

Interest on TDS is in the nature of Penal Interest, so it will not be allowable as business expenditure.

@ Ram da one & Ankit Gupta.......

All interest which are penal in nature are not disallowed under income tax act....

interest on service tax, sales tax are allowed expenditure under income tax act....

@ Ram da one......

da example which u have given is not correct.....aise toh sir aap interest on bank loan bhi disallowed kar denge.......

Interest paid on TDS not Allowed as expenditure.TDS,income tax,advance tax and FBT does not allowed as expendiure U/S 40a(ii) the same concept will apply to interest paid on TDS. interest will be charged on TDS for late payment or late filing of TDS so the expenditure occures mistak of us not a normal business expenditure so not allowed as expenditure

                                                     Thank you

My Dear  Mayank,

Interest on Bank Loan is not of Penal Nature interest ............ & both r not at all compareable 

My dear friend

Interest on sales tax and service tax are compensatory in nature. Not Penal.

Express Penalty imposed by an Act or by an officer cannot be allowed as expense.

@ Ram da one

Expenses which are penal for contravention of a law are disallowed. If the penalty is for violating the terms of a contract like repaying a loan, then there is no disallowance

yes dear you are correct, then tell me what is nature of interset paid for contravention of provisions of TDS payment/deposit under income tax act. 

yes, in short we can say that any direct tax payments like TDS,Advance Tax ,Income Tax & Wealth Tax  alonwith its interest is not allowed as deduction while computing the taxable income under income tax act. where as interst paid on indirect tax payments like service tax, excise. is allowed as deduction.