All About Section 40(a)(i) Of The Income Tax Act

Section 40(a)(i) of the Income Tax Act 1961, outlines if there is any sum paid to a non-resident subject to TDS and if its TDS is not deducted, then that income cannot be claimed as a business expenditure deduction.

The penalty for not deducting TDS will be subject to a 1% interest or else, depending on which section the deduction is made.

In such a case, you must contact the deductor or the income tax department to rectify the issue.

The expenses covered under section 40(a)(i) are fees for orifices or technical services, or any sum paid to a non-resident individual that is subject to TDS.