Accounting treatment in income tax

[vijayasathya raman]

Dear Friends,My client is lawyer deling in Registration & Documentaion of the real estate transactions for various campanies.In this connections he left with no option but to pay ( Tips !! & others!!)to the Govt Officials.How to account in the books of accounts.Is it Admissible under the Income Tax Act.Kindly Clarify

AI Summary

Discussion on Illegal Payments in Real Estate: Unofficial Payments to Officials Not Deductible Under Income Tax Act. A participant in a discussion forum inquired about the accounting treatment of unofficial payments made to government officials by a lawyer involved in real estate transactions. The respondent explained that while officially allowing such payments and providing deductions could streamline processes, these payments are illegal and not permissible under the Income Tax Act. Claiming such expenses could lead to legal issues for the payer, though the recipient might remain unaffected due to lack of evidence. To challenge the system, one could document demands and payments to potentially argue for these expenses as business losses.