Chartered Accountant · ICAI M.No. 153926 · FRN 136869W
Common disallowances
- 40(a): TDS not deducted/paid
- 43B: statutory dues paid late
- 40A(3): cash payment over ₹10,000
- Personal/unsupported expenses
They increase your tax
Disallowed amounts are added back, raising taxable income — so good TDS and payment discipline saves real tax. Confirm limits.
Reducing add-backs before year-end
Most disallowances are avoidable with discipline during the year. Deduct and deposit TDS on rent, contractor, commission and professional payments on time to avoid the add-back under Section 40(a). Pay statutory dues — GST, PF, ESI, bonus, leave encashment — by the return due date so Section 43B doesn’t disallow them. Keep single cash payments to a vendor at or below ₹10,000 to stay clear of Section 40A(3). Separate genuinely personal expenses from business books. A short review a month or two before year-end, while there’s still time to deposit TDS or clear statutory dues, usually removes the bulk of the add-backs an audit would otherwise report. Where TDS was deducted late, depositing it before the return due date can still rescue the deduction, so a pre-year-end clean-up of pending TDS and statutory dues directly lowers the tax payable.