Income-tax Act, 2025 · Part D — Profits and gains of business or profession

Section 34General conditions for allowable deductions

Income-tax Act, 2025 (30 of 2025)

(1)

Any expenditure (not being an expenditure of the nature specified in sections 28 to 33, 44 to 49, 51 and 52 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 and gains of business or profession”.

(2)

For the purposes of sub-section (1), an expenditure laid out or expended wholly and exclusively for business or profession by the assessee shall not include any of the following:—

(a)an expenditure incurred for any purpose which is an offence or is prohibited by law; or

(b)an expenditure incurred on the activities relating to corporate social responsibility referred to in section 135 of the Companies Act, 2013 (18 of 2013); or

(c)an expenditure incurred on advertisement in any souvenir, brochure, tract, pamphlet or the like, published by a political party.

(3)

The expenditure mentioned in sub-section (2)(a) shall include expenditure incurred for—

(a)any purpose which is an offence under, or is prohibited by, any law in force in or outside India; or

(b)providing a benefit or perquisite in any form to a person, who may or may not be carrying on a business or exercising a profession, when its acceptance by the person is in violation of any law or rule or regulation or guideline governing the conduct of that person; or

(c)compounding an offence under any law in force in or outside India; or

(d)settling proceedings initiated in relation to contravention under any law notified by the Central Government in this behalf.

This section refers to

§ 28 Rent, rates, taxes, repairs and insurance

Referenced by

§ 207(5)

§ 208 Tax on income from units purchased in foreign currency or capital gains arising from their transfer.

§ 209 Tax on income from bonds or Global Depository Receipts purchased in foreign currency or capital gains arising from their transfer.

§ 210 Tax on income of Foreign Institutional Investors from securities or capital gains arising from their transfer.

§ 225 Income from business of operating qualifying ships

§ 230(1)

§ 27 Manner of computing profits and gains of business or profession

§ 55 Insurance business

§ 58(1)

§ 60(1)

§ 61(1)

§ Schedule XI RECOGNISED PROVIDENT FUNDS

§ Schedule XIV INSURANCE BUSINESS

Rule 100 Safe harbour for income attribution in case of income from business and profession