The existing provisions of section 43B of the Act, inter alia, provide that any sum payable by the assessee by way of tax, cess, duty or fee, employer contribution to Provident Fund, etc., is allowable as deduction of the previous year in which the liability to pay such sum was incurred (relevant previous year) if the same is actually paid on or before the due date of furnishing of the return of income irrespective of method of accounting followed by a person.

With a view to ensure the prompt payment of dues to Railways for use of the Railway assets, it is proposed to amend section 43B so as to expand its scope to include payments made to Indian Railways for use of Railway assets within its ambit.

This amendment will take effect from 1stApril, 2017 and will, accordingly, apply in relation to the assessment year 2017-18 and subsequent years.

Clause 23 of Finance Bill 2016

Clause 23 of the Bill seeks to amend section 43B of the Income-tax Act relating to certain deductions to be only on actual payment.

The aforesaid section, inter alia, provides that certain sum payable by the assessee shall be allowed as deduction irrespective of the previous year in which the liability to pay such sum was incurred if the same is actually paid on or before the due date of furnishing of the return of income.

It is proposed to insert a new clause in the said section so as to provide that any sum payable by the assessee to the Indian Railways for use of railway assets shall be allowed as deduction only, if it is actually paid on or before the due date of furnishing the return of income of the relevant previous year.

This amendment will take effect from 1st April, 2017 and will, accordingly, apply in relation to the assessment year 2017-2018 and subsequent years.

[Clause 23]

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Tags : Budget 2016 (434) section 43B (69)

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