Income tax demand a contingent liability
Yes, the interest on income tax demand is a contingent liability because it is a potential obligation that arises from an event that has already occurred, which is the assessment of additional income tax. However, the final amount of interest payable may depend on various factors, such as the outcome of any appeals or disputes, and therefore cannot accurately determine at the time of assessment. As such, it is considered a contingent liability until the final amount is determined and paid. The interest on income tax demands a contingent liability occur.
For more information to visit: https://www.incometax.gov.in
