Sum payable to Indian Railways for use of railway assets allowable as deduction in the year in which the liability to pay such sum is incurred, only if payment is made on or before the due date of filing of return [Section 43B]

Effective from: A.Y.2017-18

(i) Under section 43B, any sum payable by the assessee by way of tax, cess, duty or fee, employer contribution to Provident Fund, etc., is allowable as deduction of the previous year in which the liability to pay such sum was incurred (relevant previous year) if the same is actually paid on or before the due date of furnishing of the return of income irrespective of method of accounting followed by a person.

(ii) In effect, section 43B requires actual payment of tax, cess, duty or fee on or before the due date of filing return of income for claim of deduction in the previous year in which the liability to pay such sum was incurred.

(iii) In order to encourage timely payment of dues to Railways for use of the Railway assets, clause (g) has been inserted in section 43B to expand its scope to include any sum payable by the assessee to the Indian Railways for use of Railway assets, within its ambit.