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5. Sec. 40A : Amount Expressly Disallowed As Deduction

1.         Fringe Benefit Tax [Sec. 40(a)(ic)] :           Fringe Benefit Tax (FBT) is not deductible while calculating business income.

2.         Income Tax [Sec. 40(a)(ii)] :           any sum paid on account of Income Tax ( i.e. any rate or tax  levied on the profits or gains of any business or profession) is not deductible. Similarly, any interest, penalty, fine for non-payment or late payment of Income tax is not deductible. This rule is applicable whether Income-Tax payable in India or Outside India.

3.         Wealth Tax [Sec. 40(a)(iia)] :          Any sum paid on account of wealth tax under the Wealth Tax Act, 1957, or Tax of a similar nature chargeable under any law outside India is not deductible.

4.         Salary Payable Outside India without  Tax Deduction [Sec. 40(a)(iii)] :          Subject to following conditions..

            Ø It is payable outside India ( to any person resident or non-resident) or In India to a non-resident

            Ø Tax has not been paid to the Government  nor deducted at source under the Income Tax Act.

5.         Provident Fund Payment without Tax Deducted at Source [Sec. 40(a)(iv)] :  Any payment to Provident Fund is not deductible if the assessee has not made effective arrangement to secure that tax shall be deducted at source from any payment made from the fund which are chargeable to tax under the head “Salaries”

6.         Tax on Perquisites Paid by the Employer [Sec. 40(a)(v)] :        The provisions are given below :-

            1.         The Employer provides non-monetary perquisites to employees

            2.         Tax on Non-Monetary perquisites is paid by the employer.

3.         The Tax so paid by the employer is not taxable in the hands of employees by  virtue of section 10(10CC)

4.         While calculating income of the employer, the tax paid by the employer on non-monetary perquisites is not deductible u/s 40(a)(v)


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