Section 43B of the Income Tax Act states that certain statutory expenses can be claimed in the year in which the payment was made and not in the year in which the payment liability was incurred. According to Section 43B, the expenses can be claimed by the assessee only in the year of payment. This Section of the Income Tax Act, deals with deductions on actual payments, while computing income under the head profit and gains from business or profession.
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If the assessee follows the mercantile system of accounting, the payments mentioned below can be claimed on due basis:
SEE ALSO: Income Tax Law And Income Tax
The taxpayer can claim deductions if the payments are made under the accrual system of accounting under the conditions stated below:
Can expenditure under Section 43B of Income Tax Act be claimed as deduction under the year of payment, although it is an expenditure of the subsequent year?
Section 43B deals with certain specific items that are eligible for deductions, which can be allowed for payment in the year the actual payment is made. In case such payments are made in advance, it can be allowed if the liability has occurred, although the amount is deductible under normal circumstances under law in the year in which it is recorded as expenditure. As long as the payment is for an admissible item of expenditure, it is deductible, irrespective of the year to which it relates to as long as it is paid during the year.
SEE ALSO: Section 80E of Income Tax Act
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