Opinion Of Eminent Legal Luminaries On Controversial Issues

Fee for default in furnishing statements -Fee is not a penalty or interest.

QUERY: Can fee paid under Section 234E be claimed as deduction while computing the total income under the head "Profit and gains of business or profession"?
ANSWER: Fee paid u/s. 234E is not a penalty or interest under the Income-tax Act, 1961. It is a fee which is for late filing of statement of tax deduction at source u/s. 200(3) of the Act. Similarly fee paid for late filing of statement of tax collected at source u/s. 206C(3) of the Act. Hence there is no loss to the revenue, as tax deducted or tax collected had to be paid before filing the statement. So fee is payable by the tax deductor or tax collector for late compliance of law. Hence, the same can be claimed as deduction while computing the total income under the head "Profits and gains of business or profession."
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