Section 40(a)(ib) - Disallowance for non-payment of equalisation levy - Income Tax - Ready Reckoner - Income Tax

Section 40(a)(ib) - Disallowance for non-payment of Equalisation Levy Chapter VIII of the Finance Act, 2016 provides for deduction of equalization levy for certain specified services. A new section 40( a )( ib ) has been inserted with effect from 1-6-2016 to provide that the consideration paid or payable shall not be allowed as a deduction to an assessee, if the conditions given below are fulfilled: There is consideration paid or payable by an assessee to a non-resident. The consideration is paid or payable for a specified service. The specified service is such that equalization levy is deductible under the provision of Chapter VIII of the Finance Act, 2016 . Such levy has not been deducted; or after deduction, it is not been paid on or before the due date for filing return specified in section 139(1) . If the equalization levy is deducted in any subsequent year or has been deducted during the previous year but paid after the due date specified in section 139(1) the sum shall be allowed as deduction in computing the income of previous year in which such levy has been paid.