Section 43B

⁷⁴ [Certain deductions to be only on actual payment.

⁷⁵ 43B.  ⁷⁶Notwithstanding anything contained in any other provision of this Act, a deduction otherwise allowable under this Act in respect of—

        ⁷⁷ [(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, ⁷⁸[or]

        ⁷⁹ [(c)  any sum referred to in clause (ii) of sub-section (1) of section 36,]  ⁸⁰ [or]

        ⁸⁰ [(d)  any sum payable by the assessee as interest on any loan or borrowing from any public financial institution  ⁸¹[or a State financial corporation or a State industrial investment corpora­tion], in accordance with the terms and conditions of the agree­ment governing such loan or borrowing ⁸²[, or]

       ⁸²[( e)  any sum payable by the assessee as interest on any ⁸³[ loan or advances] from a scheduled bank in accordance with the terms and conditions of the agreement governing such loan ⁸⁴[ or advances],] ⁸⁵ [or]

        ⁸⁶[( f)  any sum payable by the assessee as an employer in lieu of any leave at the credit of his employee,]

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 :

⁸⁷ [Provided that nothing contained in this section shall apply in relation to any sum ⁸⁸ [***] 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 along with such return.

⁸⁹ [***]]

Explanation ⁹⁰[ 1].—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.]

⁹¹ [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.]

⁹² [ ⁹³[ Explanation 3].—For the removal of doubts it is hereby declared that where a deduction in respect of any sum referred to in clause (c) ⁹⁴ [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.]

⁹⁵ [Explanation 3A.—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.]

⁹⁶ [Explanation 3B.—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.]

⁹⁷ [Explanation 4.—For the purposes of this section,—

         (a )  "public financial institutions" shall have the meaning assigned to it in section 4A⁹⁸ of the Companies Act, 1956 (1 of 1956);

     ⁹⁹[( aa)  "scheduled bank" shall have the meaning assigned to it in the Explanation  to clause (iii) of sub-section (5) of section 11;]

         (b )  "State financial corporation" means a financial corporation established under sec­tion 3 or section 3A or an institution notified under section 46 of the State Financial Corporations Act, 1951 (63 of 1951);

          (c )  "State industrial investment corporation" means a Government  company ¹ 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 ² [eligible for deduction under clause (viii) of sub-section (1) of section 36]. ]