Disallowance U/s 40(a)(ia)

[C ChiranjeeviRaj]

For A.Y 2024-2025 I am filing updated income tax return. My client has constructed a building on contract basis and it is billed as construction service without bifurcation for materials. It is a fixed asset. TDS is not deducted. What is present position of law? Whether disallowance U/s 40(a)(ia) is applicable for this capital expenditure. If so how to be made.

AI Summary

Tax Deduction Clarified: Building Construction Expense Allowed Despite Missing TDS Under Section 40(a)(ia) A taxpayer sought guidance on tax treatment for a building construction contract without TDS deduction. The discussion clarifies that Section 40(a)(ia) does not apply to capital expenditures like building construction. The expense should be capitalized, with depreciation allowed. While TDS was not deducted, no disallowance is required for the updated income tax return. Potential consequences include interest and penalty for TDS non-compliance.