Business Expenses Under Income Tax Act

General section 37 1 of income tax act.

Business expenses under income tax act. She is keen to understand how business expenses are allowed under the indian income tax act 1961. Disallowance of business expenditure on account of non deduction of tax on payment to resident payee sec. Generally only the cost of advertising in canadian newspapers magazines journals and on canadian television and radio networks can be deducted.

Year in which such tax has been paid. Any expenditure not being expenditure of the nature described in sections 30 to 36 and not being in the nature of capital expenditure or personal expenses of the assessee laid out or expended wholly and exclusively for the purposes of the business or profession shall be allowed in computing the income chargeable under the head profits. 40 a ia any interest commission or brokerage rent royalty fees for professional services fees.

What is an acceptable business promotion expense under the income tax act depends on what type of advertising you re doing and where you re doing it. As a knowledgeable person in taxation how will you address the worry of ms. Stock businessmen who trade stock of high value can claim such a deduction on the insurance premium.

However assessee engaged in a business and declaring income under presumptive tax scheme under section 44ad whose total sales turnover or gross receipts does not exceed rs 2 crore are not liable to get their accounts audited under section 44ab. Expenses covered under section 30 to 36. Cit supra case that the wealth tax on assets held by the assessee for the purpose of his business was deductible as a business expense in computing the assessee s income from business.

Insurance premium paid towards stock cattle and health of employees. If the gross turnover or gross receipts of business exceeds rs. If any expense is covered under section 30 to section 36 of the income tax act 1961 and could not be allowed due to non satisfying condition laid down under section same cannot be allowed under this residuary section.

As per the amendment brought by section 284 of the income tax amendment act 1972 any sum paid as wealth tax for the assessment year 1957 58 or any. The following expenses are allowed as deductions under section 36 of the income tax act 1961.