Whether amount of sales tax liability converted into loans may be allowed as deduction in assessment for previous year in which such conversion has been permitted by or under Government orders

Can Sales Tax Liabilities Converted to Loans Be Deducted? Section 43B Clarifies Deduction Rules and Conditions.

The circular addresses whether sales tax liabilities converted into loans can be deducted in the assessment year when the conversion is permitted by government orders. It clarifies that if state governments issue orders deeming sales tax as collected and converted into loans, these should be treated similarly to amendments in the Sales-tax Act, allowing deductions under section 43B. The circular also explains that interest converted into loans is not considered 'actually paid' and thus not deductible unless paid in cash. Waived interest does not qualify for deductions, and deductions are allowed only upon actual payment.