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Certain Deductions to be Allowed only on Actual Payment [Section 43B] - for Computing Profits and Gains of Business or Professions

In respect of  certain following expenditure/ payments, the deduction is allowed only if the amount has been actually paid during the previous year.

 

1.            Any sum payable by way of tax, duty, cess or fee, by  whatever name called, under any law for the time being in  force. 

 

2.            Any sum payable by the assessee as an employer by way of  contribution to any provident fund or superannuation fund or  gratuity fund or any other fund for the welfare of employees. 

 

3.            Any sum payable to an employee as bonus or commission  for services rendered. 

 

4.            Any sum payable by the assessee as interest on any loan or  borrowing from any public financial institution or State  Financial Corporation or State Industrial Investment  Corporation like IDBI, IFCI, UPSIDC, Delhi Financial  Corporation, etc. in accordance with the terms and conditions  of the agreement governing such loan or borrowing. 

 

5.            Any sum payable by the assessee as interest on any loan or  advance from a scheduled bank or a co-operative bank (other  than a primary agricultural credit society or primary cooperative agricultural and rural development bank) in  accordance with the terms and conditions of the agreement  governing such loan. 

 

6.            Any sum payable by the assessee as an employer in lieu of  any leave at the credit of his employee. 

 

7.            Any sum payable by the assessee to the Indian Railways for  the use of railway assets. 

 

8.            Any sum payable by the assessee as interest on any loan or  borrowing from a deposit-taking NBFCs and systemically  important non deposit-taking NBFCs in accordance with the  terms and conditions of the agreement governing such loan or  borrowing

 

Stipulated Time Period for Actual Payment :

 

Due amount should be paid on or  before the due date of furnishing the  return of income u/s 139(1) in respect  of the previous year in which the  liability to pay such sum was  incurred.

 

However, in cases (1) to (8), if the  payment of outstanding liability is  made after the due date, deduction  can be claimed in the year of  payment. 

 

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