General Deductions under PGBP: Section- 37
General Deductions under Profit and Gain from Business or Profession (PGBP): Section- 37
Introduction:
Any expenditure (not being expenditure covered under sections 30 to 36) shall be allowed as deduction if:
- Such expenses are not being in the nature of capital expenditure or personal expenses.
- Expended wholly and exclusively for the purposes of the business or profession.
List of expenses which are Allowed/Disallowed under PGBP are tabulated below:
| Nature of Expense | Treatment under PGBP |
| Corporate Social Responsibility (CSR) | Disallowed |
| Gift to employee | Allowed |
| Advertisement in brochure, souvenir, newspaper, a pamphlet published by Political Party | Disallowed |
| Professional fee paid for Tax audit or litigation expenses related to Income tax cases | Allowed |
| Different types of provisions made in the books. Exception u/s 36(1)(viia): Provision for Bad Debts of Bank | Disallowed |
| Expenses incurred on Buyback of Shares, Bonus Shares (when there is no Change in Authorised Capital), and Loan or Debenture issue. | Allowed |
| Expenses incurred on Initial public offering (IPO), Follow on Public Offer (FPO), and Right Shares | Disallowed |
| Premium Paid by the firm on Keyman Insurance Policy (KIP) of a partner | Allowed |
| Expenses like: Bribe, Freebies, or other illegal expenses | Disallowed |
| Interest on loan taken for payment of Income-tax | Disallowed |
| Direct taxes and Interest thereon | Disallowed |
| Indirect taxes and Interest thereon | Allowed |
| Penalty paid under Direct or Indirect Taxes Note: Penalty is Breach of Law, therefore cannot be claimed as an expense. | Disallowed |
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