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There are Certain expenses which are to be actually paid to claim deduction.

Last date for payment for these is the ITR Filing due date(31 July /30 September)

If these are actually paid after that date,then deduction allowed next year when payment actually made.

 

 Details of such expenses are

1.Any tax/duty/cess to be paid to government

 

2.Contribution to PF/Super Annuation/Gratuity fund

 

3.Bonus or Commission paid to Employees:-Refer 36(1)(ii)

If declared and not paid then not allowed as deduction

 

4Interest on loan taken from Scheduled Banks/Public Financial Instituitions/State financial Corporation/State Industrial Investment Corporation etc allowed only on payment.

 

 5, Any leave salary/leave encashment paid to employees

 

Section 43B Certain Deductions Only if Amt paid - Important Sections of PGBP Income

 

 

Q 1

Proft and Loss of Ajay & Co,a proprietorship for FY 2015-16
SALES800000
Less 
EXPENSES500000
PROFIT300000

Suppose Expenses Include

Interest on loan of 100000 taken from bank which was paid as follows

DateAmount
20-Feb-1630000
30-Jun-1650000
04-Aug-1620000
Total100000

Due date of ITR is 31 July 2016 but assessee filed ITR on 05-Aug-16 after paying interest

-a-

Computation of PGBP Income 
Profit as per P& L A/c300000
Add 
Expense Disallowed 
Interest on loan not paid till ITR Filing Date (31 July 2016)20000
  
Less 
Expense Allowed 
  
  
PGBP INCOME320000

-ea-

Q 2

Solve last question assuming loan was taken from friends and relative

-a-

In this case,expense will not be disallowed

Computation of PGBP Income 
Profit as per P& L A/c300000
Add 
Expense Disallowed 
  
  
Less 
Expense Allowed 
  
  
PGBP INCOME300000

-ea-

  1. Income Tax
  2. PGBP Income
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CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 6 years. He provides courses for Practical Accounts, Taxation and Efiling at teachoo.com.
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