1.

Explain the expenses which are expressly disallowed when computing total income

Answer»

The followings are the expense, allowances and losses which are also not allowed as deduction while computing income under the head ‘PROFITS and gains of business or profession’

(i) Drawings private or personal expenses of the proprietors PARTNERS etc.

(ii) Any expenditure in the NATURE of capital expenditure.

(iii) The amount paid as charity and presents. However, subscription is allowed.

(IV) Any provision or reserve except the special reserve of the approved financial corporations.

(v) Past losses (i.e., loss of the past previous years) charged to profit and loss account.

(vi) Any expenditure incurred by an assessee for any purpose which is an offence or which is prohibited by any law, shall not be allowed to be DEBITED as business expenditure out of any income. This amendment has been made by the Finance Act (2) 1998 with retrospective effect from 1-4-1962.



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