Prior Period Expenses

Tax Glossary Definition

Prior Period Expenses

Prior period expenses are costs that relate to previous accounting periods but are identified and recorded in the current financial year. While these expenses are allowed in the books of accounts, their treatment for tax purposes may differ depending on the Income Tax provisions.

Example: Legal fees of ₹20,000 incurred in FY 2023–24 but recorded in FY 2024–25 are treated as a prior period expense

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