Section 43BCentral Act

Section 43B: [ Certain deductions to be only on actual payment. [Inserted by Act 11 of 1983, Section 18 (w.e.f. 1.4.1984).]

The Income-tax Act, 1961

[ Certain deductions to be only on actual payment. [Inserted by Act 11 of 1983, Section 18 (w.e.f. 1.4.1984).]

- Notwithstanding anything contained in any other provision of this Act, a deduction otherwise allowable under this Act in respect of-

(a)

[ any sum payable by the assessee by way of tax, duty, cess or fee, by whatever name called, under any law for the time being in force, or]

(b)

any sum payable by the assessee as an employer by way of contribution to any provident fund or superannuation fund or gratuity fund or any other fund for the welfare of employees, [or] [ Inserted by Act 4 of 1988, Section 15 (w.e.f. 1.4.1989).]

(c)

[ any sum referred to in clause (ii) of sub-section (1) of section 36,] [Inserted by Act 4 of 1988, Section 15 (w.e.f. 1.4.1989).][or] [ Inserted by Act 26 of 1988, Section 12 (w.e.f. 1.4.1989).]

(d)

[ any sum payable by the assessee an interest on any loan or borrowing from any public financial institution ] [Inserted by Act 26 of 1988, Section 12 (w.e.f. 1.4.1989).][or a State financial corporation] [ Inserted by Act 12 of 1990, Section 13 (w.e.f. 1.4.1991).] [or a State industrial investment corporation, in accordance with the terms and conditions of the agreement ] [Inserted by Act 26 of 1988, Section 12 (w.e.f. 1.4.1989).][governing such loan or borrowing; or] [ Substituted by Act 33 of 1996, Section 18, for certain words (w.e.f. 1.4.1997).]

(da)[ any sum payable by the assessee as interest on any loan or borrowing from a deposit taking non-banking financial company or systemically important non-deposit taking non-banking financial company, in accordance with the terms and conditions of the agreement governing such loan or borrowing, or] [Inserted by Finance (No. 2) Act, 2019 (Act No. 23 of 2019), dated 1.8.2019.]

(e)

[ any sum payable by the assessee as interest on any ] [Inserted by Act 33 of 1996, Section 18 (w.e.f. 1.4.1997).][loan or advances] [ Substituted by Act 32 of 2003, Section 21, for certain words (w.e.f. 1.4.2004).] [from a scheduled bank in accordance with the terms and conditions of the agreement governing ] [Inserted by Act 33 of 1996, Section 18 (w.e.f. 1.4.1997).][such loan or advances] [Substituted by Act 32 of 2003, Section 21, for certain words (w.e.f. 1.4.2004).], [or] [ Inserted by Act 14 of 2001, Section 27 (w.e.f. 1.4.2002).]

(f)

[ any sum payable by the assessee as an employer in lieu of any leave at the credit of his employee,] [<SPAN class=amd2><A TITLE =], shall be allowed (irrespective of the previous year in which the liability to pay such sum was incurred by the assessee according to the method of accounting regularly employed by him) only in computing the income referred to in section 28 of that previous year in which such sum is actually paid by him:

[Provided that nothing contained in this section shall apply in relation to any sum ] [Inserted by Act 11 of 1987, Section 10 (w.e.f. 1.4.1988).][* * *] [ Certain words omitted by Act 32 of 2003, Section 21 (w.e.f. 1.4.2004).] [which is actually paid by the assessee on or before the due date applicable in his case for furnishing the return of income under sub-section (1) of section 139 in respect of the previous year in which the liability to pay such sum was incurred as aforesaid and the evidence of such payment is furnished by the assessee alongwith such return: ] [Inserted by Act 11 of 1987, Section 10 (w.e.f. 1.4.1988).][* * *] [ Second Proviso omitted by Act 32 of 2003, Section 21 (w.e.f. 1.4.2004).][Explanation 1] [ Explanation renumbered as Explanation 1 by Act 4 of 1988, Section 15 (w.e.f. 1.4.1989).].-For the removal of doubts, it is hereby declared that where a deduction in respect of any sum referred to in clause (a) or clause (b) of this section is allowed in computing the income referred to in section 28 of the previous year (being a previous year relevant to the assessment year commencing on the 1st day of April, 1983, or any earlier assessment year) in which the liability to pay such sum was incurred by the assessee, the assessee shall not be entitled to any deduction under this section in respect of such sum in computing the income of the previous year in which the sum is actually paid by him.[Explanation 2. - For the purposes of clause (a), as in force at all material times, "any sum payable" means a sum for which the assessee incurred liability in the previous year even though such sum might not have been payable within that year under the relevant law.] [ Inserted by Act 13 of 1989, Section 9 (w.r.e.f. 1.4.1984).][Explanation 3] [ Explanation 2 renumbered as Explanation 3 by Act 13 of 1989, Section 9 (w.r.e.f. 1.4.1989).].-For the removal of doubts it is hereby declared that where a deduction in respect of any sum referred to in clause (c) or clause (d) of this section is allowed in computing the income referred to in section 28 of the previous year (being a previous year relevant to the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year) in which the liability to pay such sum was incurred by the assessee, the assessee shall not be entitled to any deduction under this section in respect of such sum in computing the income of the previous year in which the sum is actually paid by him.[Explanation 3-A. - For the removal of doubts, it is hereby declared that where a deduction in respect of any sum referred to in clause (e) of this section is allowed in computing the income referred to in section 28 of the previous year (being a previous year relevant to the assessment year commencing on the 1st day of April, 1996, or any earlier assessment year) in which the liability to pay such sum was incurred by the assessee, the assessee shall not be entitled to any deduction under this section in respect of such sum in computing the income of the previous year in which the sum is actually paid by him.] [ Inserted by Act 33 of 1996, Section 18 (w.e.f. 1.4.1997).][Explanation 3AA. - For the removal of doubts, it is hereby declared that where a deduction in respect of any sum referred to in clause (da) is allowed in computing the income referred to in section 28, of the previous year (being a previous year relevant to the assessment year commencing on the 1st day of April, 2019, or any earlier assessment year) in which the liability to pay such sum was incurred by the assessee, the assessee shall not be entitled to any deduction under this section in respect of such sum in computing the income of the previous year in which the sum is actually paid by him.] [Inserted by Finance (No. 2) Act, 2019 (Act No. 23 of 2019), dated 1.8.2019.][Explanation 3-B. - For the removal of doubts, it is hereby declared that where a deduction in respect of any sum referred to in clause (f) of this section is allowed in computing the income, referred to in section 28, of the previous year (being a previous year relevant to the assessment year commencing on the 1st day of April, 2001, or any earlier assessment year) in which the liability to pay such sum was incurred by the assessee, the assessee shall not be entitled to any deduction under this section in respect of such sum in computing the income of the previous year in which the sum is actually paid by him.] [ Inserted by Act 14 of 2001, Section 27 (w.e.f. 1.4.2002).][Explanation 3-C. - For the removal of doubts, it is hereby declared that a deduction of any sum, being interest payable under clause (d) of this section, shall be allowed if such interest has been actually paid and any interest referred to in that clause which has been converted into a loan or borrowing [or debenture or any other instrument by which the liability to pay is deferred to a future date] shall not be deemed to have been actually paid.] [ Inserted by Act 21 of 2006, Section 12 (w.r.e.f. 1.4.1989).][Explanation 3CA. - For the removal of doubts, it is hereby declared that a deduction of any sum, being interest payable under clause (da), shall be allowed if such interest has been actually paid and any interest referred to in that clause which has been converted into a loan or borrowing [or debenture or any other instrument by which the liability to pay is deferred to a future date] shall not be deemed to have been actually paid.] [Inserted by Finance (No. 2) Act, 2019 (Act No. 23 of 2019), dated 1.8.2019.][Explanation 3-D. - For the removal of doubts, it is hereby declared that a deduction of any sum, being interest payable under clause (e) of this section, shall be allowed if such interest has been actually paid and any interest referred to in that clause which has been converted into a loan or advance [or debenture or any other instrument by which the liability to pay is deferred to a future date] shall not be deemed to have been actually paid.] [ Inserted by Act 21 of 2006, Section 12 (w.r.e.f. 1.4.1997).][Explanation 4. - For the purposes of this section,-

(a)"public financial institution" shall have the meaning assigned to it in section 4-A of the Companies Act, 1956 (1 of 1956);]

(aa)[ "scheduled bank" shall have the meaning assigned to it in the Explanation to clause (iii) of sub-section (5) of section 11;] [ Substituted by Act

27 of 1999

, Section 27, for Clause (aa) (w.e.f. 1.4.2000).]

(b)[ "State financial corporation" means a financial corporation established under section 3 or section 3-A or an institution notified under section 46 of the State Financial Corporations Act, 1951 (

63 of 1951

); [Substituted by Act 12 of 1990, Section 13, for Explanation 4 (w.e.f. 1.4.1991).]

(c)"State industrial investment corporation" means a Government company within the meaning of section 617 of the Companies Act, 1956 (1 of 1956), engaged in the business of providing long-term finance for industrial projects and] [eligible for deduction under clause (viii) of sub-section (1) of section 36] [ Substituted by Act 10 of 2000, Section 20, for " approved by the Central Government under clause (vii) of sub-Section (1) of section 36" (w.e.f. 1.4.2000).]. ]

(e)[ "deposit taking non-banking financial company" means a non-banking financial company which is accepting or holding public deposits and is registered with the Reserve Bank of India under the provisions of the Reserve Bank of India Act, 1934; [Inserted by Finance (No. 2) Act, 2019 (Act No. 23 of 2019), dated 1.8.2019.]

(f)"non-banking financial company" shall have the meaning assigned to it in clause (f) of section 45-I of the Reserve Bank of India Act, 1934;

(g)

"systemically important non-deposit taking non-banking financial company" means a non-banking financial company which is not accepting or holding public deposits and having total assets of not less than five hundred crore rupees as per the last audited balance sheet and is registered with the Reserve Bank of India under the provisions of the Reserve Bank of India Act, 1934.]

[Explanation 5.—For the removal of doubts, it is hereby clarified that the provisions of this section shall not apply and shall be deemed never to have been applied to a sum received by the assessee from any of his employees to which the provisions of sub-clause (x) of clause (24) of section 2 applies.]

Sec 43AA — [ Taxation of foreign exchange fluctuation. [Inserted by Finance Act, 2018 (Act No. 13 of 2018), dated 29.3.2018.]

Sec 43C — [ Special provision for computation of cost of acquisition of certain assets. [ Inserted by Act 26 of 1988, Section 13 (w.e.f. 1.4.1988).]

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