Section 40(a)(ii)- Income Tax - Income Tax - Ready Reckoner - Income Tax

Section 40(a)(ii) : Income Tax Income Tax including: Tax paid in foreign country for which relief/ credit is available under DTAA under section 90 / 90A . Tax paid in foreign country for which credit is available under section 91 . is not deductible. Note: Payment of income tax, surcharge and education cess is not deducible under section 40(a)(ii) and so interest u/s 234A , 234B or 234C which has to be regarded as accretion to tax cannot also be allowed to be deducted. Foreign income tax cannot be allowed as deduction. Agricultural income tax Amendment made by the Finance Act, 2022 [w.r.e.f. AY 2005-06] Explanation 3.- For the removal of doubts, it is hereby clarified that for the purposes of this sub-clause, the term tax shall include and shall be deemed to have always included any surcharge or cess, by whatever name called, on such tax. Tax consequences when surcharge/cess was claimed as deduction before the aforesaid amendment [ Section 155(18) along with Rule 132 ] Section 155 has been amended by the finance act 2022 (w.e.f. 01.04.2022) to recompute income where any deduction in respect of any surcharge or cess, which is not allowable as deduction under section 40, has been claimed and allowed in the case of an assessee in any previous year, such claim shall be deemed to be under-reported income of the assessee for such previous year for the purposes of section 270A(3) ,notwithstanding anything contained in section 270A(6) , and the Assessing Officer shall recompute the total income of the assessee for such previous year and make necessary amendment; and the provisions of section 154 shall, so far as may be, apply thereto, the period of four years specified in section 154(7) being reckoned from the end of the previous year commencing on the 1st day of April, 2021. Exceptions of section 155(18) waiver from penalty u/s 270A(3) where the assessee makes an application electronically to the Assessing Officer in the form no. 69 on or before 31st March 2023, requesting for recomputation of the total income of the previous year without allowing the claim for deduction of surcharge or cess and pays the amount due thereon within the specified time, such claim shall not be deemed to be under-reported income for the purposes of section 270A(3). The assessee shall, after making the payment of the tax determined under rule 132(4) , furnish the details of payment of tax in Form No.70 to the Assessing Officer within thirty days from date of making the payment. Other relevant Payment of income tax, surcharge and surcharge cess is not deductible as per section 40(a)(ii) and also be u/s 234A, 234B, 234C which has to be regarded as accretion to tax cannot also be allowed to be deducted. any penalty, fine under the income tax act is not deductible. Interest tax paid or payable by a credit institution under the interest -tax act, 1974 is deductible.