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Thursday, April 14, 2011

Now you can claim Income Tax deduction for fines Paid to RTO


Now you can claim income-tax deduction for fines paid to the RTO that are compensatory in nature. In a recent order, Income-tax Appellate Tribunal, (ITAT) has held that fines paid to RTO is an allowable expenditure under the Income-tax Act.
According to the provisions of the Income-tax Act, if a person is penalised for violating a law, the penalty paid for the offence is not allowable as expenditure for the purpose of computing his income under the Income-Tax Act. The rationale behind this principle is that the income-tax law should not be seen supporting or encouraging people to violate the laws of the land

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