General Deductions under PGBP: Section- 37

General Deductions under PGBP: Section- 37

General Deductions under Profit and Gain from Business or Profession (PGBP): Section- 37


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 ExpenseTreatment under PGBP
Corporate Social Responsibility (CSR)Disallowed
Gift to employeeAllowed
Advertisement in brochure, souvenir, newspaper, a pamphlet published by Political PartyDisallowed
Professional fee paid for Tax audit or litigation expenses related to Income tax casesAllowed
Different types of provisions made in the books.
Exception u/s 36(1)(viia): Provision for Bad Debts of Bank
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 SharesDisallowed
Premium Paid by the firm on Keyman Insurance Policy (KIP) of a partnerAllowed
Expenses like: Bribe, Freebies, or other illegal expensesDisallowed
Interest on loan taken for payment of Income-taxDisallowed
Direct taxes and Interest thereonDisallowed
Indirect taxes and Interest thereonAllowed
Penalty paid under Direct or Indirect Taxes
Note: Penalty is Breach of Law, therefore cannot be claimed as an expense.


Read More on Income-tax

Check out my other Blogs

CA Aastha Singhal