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Prior period expense

Eldhose MV (Associate) (63 Points)

15 August 2020

I want to know whether prior period expenses are tax deductible?

Scenario- A company has received the bill dated march 31st on may 1st, by the time accounts was closed. So these expense has accounted in next fy. Please tell me whether these expense can be claimed in the fy in which it is accounted?

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3 Replies

prasad Nilugal (3914 Points)
Replied 15 August 2020

Please inform what type of expenses ?.If Expense were of F.Y 2019-20 then you can claim Input Tax credit up to the date of September month GSTR3B return of 2020 .If expenses are of block credit then you can not claim the same .
In Income Tax perior period Expense will not allowed as deduction . please refer IND AS 8 .

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Eldhose MV (Associate) (63 Points)
Replied 15 August 2020

It is legal fees paid to an advocate

prasad Nilugal (3914 Points)
Replied 15 August 2020

As per notification 13/2017 dated 28th June 2017 , supply of legal services , RCM applicable to GST registered company . If you have accounted in the books in current year and paid GST on RCM , then you can claim up to September 2020month 3B return date , if expenses pertains to F.Y 19-20 .
In Income Tax you may not get deduction as perior period expense.