Section 43 B

In computation of income under the head profits and gains of business or profes sion pgbp some of the expenses are allowed under income tax act 1961 and can be claimed by the assessee only in the year in which the payment is actually made.

Section 43 b. 31 2005 see section 1322 c 1. The following sum are allowed in the year in which they are incurred only if they are paid before the due date of furnishing the return of income under section 139 1 of that year. Section 43 b allowance of deduction on payment basis if the assessee follows mercantile system of accounting actual payment of expenditure during the p y is not the essential condition however following are the expenses which are necessarily required to be paid even if mercantile system of accounting is adopted.

Few expenses are deductible only on actual payment being made. Section 1026 43 b 8 includes in the evaluation of mortgage related obligations premiums and similar charges identified in 1026 4 b 5 7 8 or 10 that are required by the creditor. These expenses come under section 43b of the income tax act.

106 554 inserted as defined in section 193 b after expenses and struck out under section 193 after allowable. The sale of cemetery lots and plots or the sale of crypts in a community mausoleum or niches in a columbarium for speculative purposes or the conveyance of any portion of a cemetery already dedicated to burial purposes as security for debt is hereby prohibited and every such conveyance shall be void and of no effect. Section 43b of the income tax act states that only certain payments can be claimed as an expense in the year which they have been paid and not in the year in which the liability to pay such sum was incurred.

Section 43b disallows the sum which are not paid in the financial year as well as not paid before due date of filing income tax return. Scope of section 43b under the income tax act 1961 the act a section 43b provides that certain expenditure payments which are otherwise eligible for deduction under the act shall be allowed as a deduction only in the year of actual payment irrespective of the year of accrual of such expenditure. This means that certain statutory expenses are allowed to be claimed in the year of payment only.

This includes all premiums or charges related to coverage protecting the creditor against a consumer s default credit loss collateral loss or similar. Section 43b of income tax there are different types of payments where section 43b applies. 109 58 applicable to credits determined under the internal revenue code of 1986 for taxable years ending after dec.

These range from contribution towards employee benefits to interest payable on loans or advances. As per section 43b.