The Income Tax Act, of 1961 allows several deductions for taxpayers which help them to manage their tax liability better. Section 36 of the Income Tax Act allows persons to claim certain expenses incurred during the course of any business or profession as a deduction.
Taxpayers can claim such tax benefits while computing their income from businesses or professions. In order to know which expenses are liable for deductions, read on!
Here is a list of expenses that one can claim as deductions:
Also Read: Section 80GG – Eligibility & Steps To Claim Deduction For Rent Paid Under Section 80GG
Section 36 of the Income Tax Act allows businesses and professionals to reduce their tax liability by claiming expenses incurred by them while carrying out their operations as deductions. Taxpayers must carefully go through each subsection and claim deductions according to prescribed provisions.
Also Read: What is Section 80D of Income Tax Act: Deductions for Medical & Health Insurance
Ans: According to this Section, taxpayers can claim certain expenses as deductions only in the year in which the payments were actually made. IT Department does not allow deductions in the year in which liability occurred.
Ans: Expenses not covered under Sections 30 to 36 and which incur during the course of business are allowed as deductions. Persons can claim such tax benefits to reduce their tax liability.
Ans: Corporations or a body corporate established by a state government or Central Government and notified in the official gazette can claim expenses related to the promotion of family planning among their employees. These expenses are not of a capital nature and come under eligible deductions as per Section 36 of the Income Tax Act.
Ans: Section 36(1)(viia) deals with deduction against the provision for bad debt of rural branches of commercial banks. The deduction amount will be equal to 8.50% of the total gross advances plus 10% of aggregate advances given by the rural branches.
Ans: Banks incorporated outside Indian territory can also claim provision for bad debts as a deduction u/s 36. However, this is limited to 5% of their total gross income in the preceding financial year.
Disclaimer: Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.
This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information, and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.
Public Provident Fund (PPF) – Know PPF Details and Its Benefits
In 1968, the National Savings Institute introduced the PPF scheme. The Public Provident Fund (PPF) ... Read More »How to Withdraw PF Amount? – Step-by-Step Guide
EPF (Employees Provident Fund) is a popular savings scheme for employees in India. The Central Gove... Read More »Previous Year in Income Tax: Exceptions on Taxation
‘Previous Year’ in the Income Tax Act, 1961 is an important concept associated with the payment... Read More »What are Capital Receipts and What are its Types?
The concept of a receipt is easy to understand as it is described as a written record that a paymen... Read More »What is Anti-Dumping Duty (ADD) – Its Working, Examples and Calculation
Anti-dumping duty refers to a tax or other charges levied on a particular imported product. The con... Read More »Loan to Purchase Land – Types, Features, Eligibility and Documents Required
Loans for land purchase or plot loans are secured loans given for purchasing plots of land. Borrowe... Read More »List of 11 Tax-Free Income Sources in India (2023)
There are many sources through which a person can earn his/her income. It can be income from salary... Read More »New GST Rates in India (2023) – Latest Changes in GST Rates
GST or the Goods and Services Tax is one of the most significant tax reforms to be ushered in since... Read More »What is Input Tax Credit (ITC) in GST – Eligibility and Documents Required To Claim ITC
GST is consumption-based taxation levied at all stages in a value chain. Set-off of GST paid in the... Read More »What is Cess on Income Tax: Overview, Types and Calculation
Cess is a tax on taxes imposed by the Central Government or state governments for specific reasons.... Read More »Section 80EEB: Eligibility & Deduction Amount
Electric vehicles are better for the environment and an efficient alternative to fuel-run vehicles.... Read More »What is Section 80GGA: Deductions on Donations Made for Rural Development
Income Tax Act provides several opportunities for taxpayers to claim partial or full deductions. Se... Read More »Top 10 Chit Fund Schemes in India in 2023
Chit funds are one of the most popular return-generating saving schemes in India. It is a financial... Read More »10 Best Gold ETFs to Invest in India in February 2023
Gold ETFs or Gold Exchange Traded Funds are passively managed funds that track the price of physica... Read More »Top 10 Demat Accounts in India [Lowest Brokerage Charges]
A Demat account was created to eliminate the time-consuming and inconvenient procedure of purchasin... Read More »20 Best Index Funds in India to Invest in 2023 (Updated on 31st Jan)
What is an Index Fund? An index fund is a type of mutual fund or exchange-traded fund (ETF) that... Read More »Best Arbitrage Mutual Funds to Invest in India: Returns and Taxation
Arbitrage funds are hybrid mutual fund schemes that aim to make low-risk profits by buying and sell... Read More »Best SIP Mutual Funds To Invest In India (2023) – Its Types And Taxation
A Systematic Investment Plan (SIP) is a convenient way to invest a fixed sum in mutual funds. For i... Read More »10 Best Corporate Bond Funds in India 2023 – With Returns
Corporate bond funds are debt funds that invest at least 80% of the investment corpus in companies ... Read More »10 Best Banks for Savings Account in India (2023)
A savings account keeps your money safe, and lets you earn interest every quarter. There are many b... Read More »All information is subject to specific conditions | © 2023 Navi Technologies Ltd. All rights are reserved.
Start Small. Dream Big.
Start your Investment Journey with just ₹10