TaxTMI 
TaxTMI 
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.
Disallowance U/s 40(a)(ia)
23 Jan 2025 
1 Reply 
8818 Views Asked by
Capital expenditure not subject to section 40(a)(ia) disallowance; capitalize cost and claim depreciation, TDS default risks interest.
Payments for construction of a building that are capitalized as a fixed asset are not subject to disallowance under section 40(a)(ia) because they are not debited to the profit and loss account; the cost should be capitalized and depreciation claimed, while failure to deduct TDS remains a separate compliance exposure attracting interest and potential penalty. (AI Summary)
Payments for construction of a building that are capitalized as a fixed asset are not subject to disallowance under section 40(a)(ia) because they are not debited to the profit and loss account; the cost should be capitalized and depreciation claimed, while failure to deduct TDS remains a separate compliance exposure attracting interest and potential penalty. (AI Summary)