Expenses Allowed as a Deduction [Section 30 to 37] for computing Income under 'Profit & Gains of Business or Profession'

1.   Rent, Rates, Taxes, Repairs and Insurance for Buildings [Section 30] – for computing Profit & Gains of Business or Profession

Deductions In respect of rent, rates, taxes, repairs and insurance for premises, used for the  purposes of the business or profession, the following deductions shall be allowed: 

(a)           where the premises are occupied by the assessee: 

(i)            as a tenant — the rent paid for such premises; and further if he has undertaken to bear  the cost of repairs to the premises, the amount paid on account of such repairs; 

(ii)           otherwise than as a tenant — the amount paid by him on account of current repairs to  the premises; 

(b)          any sum paid (whether as owner or tenant) on account of land revenue, local rates or  municipal taxes;

However, these are allowable subject to provisions of section 43B i.e. if  these expenses are claimed on due basis, the payment of the same must be made on or before  the due date of furnishing the return of income under section 139(1)

(c)           any insurance premium paid (whether as owner or tenant) in respect of insurance against risk  of damage or destruction of the premises. 

2.   Repairs and Insurance of Machinery, Plant and Furniture [Section 31] -  for computing Profit & Gains of Business or Profession

In respect of machinery, plant or furniture used for the purpose of business, the following  deductions are allowable: 

(a)           amount paid on account of current repairs, 

(b)          any insurance premium paid in respect of insurance against risk of damage or destruction of  the plant and machinery or furniture. 

The amount paid on account of current repairs shall not include any expenditure in the nature of capital  expenditure. 

3.   Depreciation [Section 32]  - for computing Profit & Gains of Business or Profession

Depreciation is the diminution in the value of an asset due to normal wear and tear and due to  obsolescence. There are different methods for calculation of depreciation under financial accounting.  The methods commonly used are: 

(a)           straight line method; 

(b)          written down value method; 

The system of claiming depreciation under the Income-tax Act is quite different from financial  accounting. 

Types of depreciation allowance under Income-tax Act:

The following are the three kinds of  depreciation allowance which are allowed under the Income-tax Act: 

(i)            Normal  depreciation for  block of assets  [Section 32(1)(ii)].

(ii)           Additional depreciation in case of any  eligible new machinery or plant (other than ship  and aircraft) which has been acquired and  installed— 

(a)           by an assessee engaged in the business of  manufacture or production of any article or  things or in the business of generation,  transmission or generation and distribution  of power [Section 32(1)(iia)]. 

(b)          before 1-4-2020 by an assessee engaged in  the business of manufacture or production  of any article or things which is set up in a  notified backward area in the State of  Andhra Pradesh or in the State of Bihar or  in the State of Telangana or in the State of  West Bengal

(iii)          Normal asset-wise  depreciation for an  undertaking engaged in generation or generation  and distribution of  power [Section  32(1)(i)].

Steps for Computing Depreciation: 

(i)            Find the opening written down value of each block at the beginning of the year. 

(ii)           Add cost of acquisition of assets acquired during the year in the respective blocks to which  the new assets belong. 

(iii)          Deduct the money received/receivable along with scrap value, if any, in respect of the assets  of the same block, which are sold, discarded or destroyed during the year. 

(iv)          (i) + (ii) – (iii) is the written down value of each block as on the last day of the previous year. 

(v)           On the closing written down value, compute the depreciation at the rates prescribed for each  block.

4.   Deduction in respect of Investment in New Plant and Machinery in notified backward areas  in certain States [Section 32AD]  - for computing Profit & Gains of Business or Profession

Manufacturing unit eligible for deduction @ 15% of actual cost of new asset being eligible  plant and machinery [Section 32AD(1)] 

A new section 32AD has been inserted in the Act to provide for an additional Investment  Allowance of an amount equal to 15% of the cost of new asset acquired and installed by an assessee  (whether company or non-company), if— 

(a)           he sets up an undertaking or enterprise for manufacture or production of any article or thing  on or after 1.4.2015 in any backward area notified by the Central Government in this behalf  in the State of Andhra Pradesh, or in the State of Bihar, or in the State of Telangana or in the  State of West Bengal; and 

(b)          the new assets are acquired and installed for the purposes of the said undertaking or  enterprise during the period beginning from 1.4.2015 & ending before 1.4.2020. 

The deduction will be available for the assessment year relevant to the previous year in which  the new asset is installed. But in order to avail benefit under section 32AD, the new asset must both  be acquired and installed on or after 1.4.2015 but on or before 31.3.2020. 

5.   Deduction on Tea Development Account, Coffee Development Account and Rubber Development  Account [Section 33AB]  -  for computing Profit & Gains of Business or Profession

Deduction under section 33AB is available to an assessee who satisfies the following conditions: 

(i)            the assessee is engaged in the business of growing and manufacturing tea or coffee or rubber  in India; 

(ii)           the assessee has, within six months from the end of the previous year or before the due date  of furnishing return of income whichever is earlier; 

(a)           deposited with National Bank for Agriculture and Rural Development (NABARD) any  amount(s) in a special account maintained by the assessee with that bank in accordance  with and for the purpose specified in a scheme approved in this behalf by the Tea Board  or the Coffee Board or the Rubber Board; or 

(b)          deposited any amount in the Deposit Account opened by the assessee in accordance with  and for the purpose specified in a scheme framed by the Tea Board or the Coffee Board  or the Rubber Board with the previous approval of the Central Government;

(iii)          the assessee must get its accounts audited by a Chartered Accountant and furnish the report  of such audit in Form No. 3AC, along with the return of income.

Quantum of Deduction under section 33AB :

Quantum of deduction shall be: 

(a)           the amount(s) deposited in the schemes referred to above; or 

(b)          40% of the profits of such business computed under the head profits and gains of business or  profession, 

whichever is less. 

The profits are to be computed before making any deduction under this i.e. section 33AB and  before making adjustment for brought forward losses u/s 72 but after making deduction of current  year depreciation. 

How to Compute Profits from such Business:

If separate accounts are maintained in respect of  business of growing and manufacturing tea or coffee or rubber in India, it shall be profits from such  business before claiming deduction under this section. In case separate accounts are not maintained it  will be calculated as under: 

6.   Deduction on Site Restoration Fund [Section 33ABA]  -  for computing Profit & Gains of Business or Profession

Deduction under section 33ABA is allowed to an assessee who satisfies the following conditions: 

1.            The assessee is carrying on business consisting of prospecting for or extraction or production  of petroleum or natural gas or both in India and in relation to which the Central Government  has entered into an agreement with such assessee for such business. 

2.            The assessee has before the end of the previous year— 

(a)           deposited with the State Bank of India any amount(s) in a special account maintained by  the assessee with that bank, in accordance with and for the purposes specified in, a  scheme approved in this behalf by the Ministry of Petroleum and Natural Gas of the  Government of India; or

(b)          deposited any amount in the Site Restoration Account opened by the assessee in  accordance with, and for the purpose specified in a scheme framed by the aforesaid  Ministry. This scheme is known as Deposit Scheme. 

3.            The assessee must get its accounts audited by an Accountant and furnish the report of such audit in the Form No. 3AD along with the  return of income.

Quantum of Deduction Under Section 33ABA:

Quantum of deduction shall be:— 

(a)           the amount deposited in the scheme referred to above; or 

(b)          20% of the profit of such business computed under the head profits and gains of business or  profession, 

whichever is less. 

The profits are to be computed before making any deduction under this section i.e. section  33ABA and before making adjustment for brought forward losses u/s 72. 

7.   Deduction on Expenditure on Scientific Research [Section 35]  -  for computing Profit & Gains of Business or Profession

Scientific research may be carried on: 

(a)           by the assessee, relating to his business; or 

(b)          by making payment to outside agencies engaged in scientific research work. 

(a)   In-house Scientific Research:

The expenses incurred on in-house research i.e. research  carried out by the assessee are allowed as a deduction, only where the research work relates to the  business of the assessee. 

An assessee can claim the following expenditure as a deduction: 

(i)            Revenue Expenses  on Scientific Research

(ii)           Capital Expenses  on Scientific Research

(i)      Revenue Expenditure [Section 35(1)(i)]:

All  revenue expenses laid out or expended on  scientific research during the previous year are  fully allowed as a deduction. 

It has further been provided that following  revenue expenses, expended or laid out during  three years immediately preceding the  commencement of the business, shall be deemed  to be the expenditure of the previous year in  which the business commences and therefore,  shall be allowable in that year to the extent these  are certified by the prescribed authority: 

(a)           payment of salary to employees engaged in  scientific research; 

(b)          purchase of material used in scientific  research. 

For example, if the assessee commences its  business on 15.12.2019 then all revenue  expenses on scientific research related to the  business incurred, on or after 15.12.2019, will  be allowed as a deduction.

Further, expenses  incurred during the period 15.12.2016 to  14.12.2019 and which are certified by the  prescribed authority will be deemed to be  expenses of the previous year 2019-20 and will  be allowable in that year. 

(ii)     Capital expenditure [Section 35(1)(iv) read  with section 35(2)]:

All capital expenses  (excepting expenditure on acquisition of land)  incurred on scientific research related to the  business of the assessee shall be allowed as a  deduction in the year in which they are incurred. 

Further, capital expenditure incurred during  three years immediately preceding the  commencement of the business shall be deemed  to be expenses of the previous year of  commencement of business and allowed in that  year. Capital expenses may be incurred on  acquisition of plant and machinery, construction  of building, acquisition of vehicles, etc. for the  purpose of scientific research. 

8.   Deduction of capital expenditure incurred for acquiring any right to use spectrum for  telecommunication services [Section 35ABA(1)]  -  for computing Profit & Gains of Business or Profession

Where any capital expenditure is incurred by the assessee for acquiring any right to use spectrum  for telecommunication services either before the commencement of the business or thereafter at any  time during any previous year and for which payment has actually been made to obtain a right to use  spectrum, there shall, subject to and in accordance with the provisions of this section, be allowed for  each of the relevant previous years, a deduction equal to the appropriate fraction of the amount of  such expenditure.

9.   Deduction on Expenditure for obtaining Licence to operate Telecommunication Services [Section 35ABB]  -  for computing Profit & Gains of Business or Profession

Where any capital expenditure is incurred by the assessee for acquiring any right to operate  telecommunication services either before the commencement of the business to operate  telecommunication service or thereafter any time during any previous year and for which payment  has actually been made to obtain a license, a deduction will be allowed in equal instalments over the  period for which the license remains in force, subject to the following: 

(a)           If the fee is paid for acquiring any right to operate telecommunication services before the  commencement of such business, the deduction shall be allowed for the previous years  beginning with the previous year in which such business commenced. 

(b)          If the fee is paid for acquiring such rights after the commencement of such business the  deduction shall be allowed for the previous years beginning with the previous year in which  the license fee is actually paid. 

10. Deduction in respect of Expenditure on Specified Business [Section 35AD] -  for computing Profit & Gains of Business or Profession

Deduction under section 35AD shall be allowed to the assessee who is carrying on any of the following specified business :

(i)            setting up and operating a cold chain facility; 

(ii)           setting up and operating a warehousing facility for storage of agricultural produce; 

(iii)          laying and operating a cross-country natural gas or crude or petroleum oil pipeline network  for distribution, including storage facilities being an integral part of such network; 

(iv)          the business of building and operating anywhere in India, a hotel of two-star or above  category, as classified by the Central Government; 

(v)           building and operating, anywhere in India, a hospital with at least 100 beds for patients; 

(vi)          developing and building a housing project under a scheme for slum redevelopment or  rehabilitation framed by the Central Government or a State Government, as the case may be,  and notified by the Board in this behalf in accordance with the guidelines as may be  prescribed; 

(vii)        developing and building a housing project under a scheme for affordable housing framed by  the Central Government or a State Government, as the case may be, and notified by the  Board in this behalf in accordance with the guidelines as may be prescribed; 

(viii)       production of fertiliser in India; 

(ix)          setting up and operating an Inland Container Depot or Container Freight Station notified and  approved under the Customs Act, 1962; 

(x)           bee-keeping and production of honey and beeswax; and 

(xi)          setting up and operating a warehousing facility for storage of sugar. 

(xii)         laying and operating a slurry pipeline for the transportation of iron ore; 

(xiii)       setting up and operating a semiconductor wafer fabrication manufacturing unit, if such unit  is notified by the Board in accordance with the prescribed guidelines; 

(xiv)       developing or maintaining and operating or developing maintaining and operating a new  infrastructure facility 

Nature and Amount of Deduction under section 35AD :

100% deduction shall be allowed an account of any  expenditure of capital nature incurred wholly and exclusively for the purpose of the above specified  business carried on by such assessee during the previous year in which such expenditure in incurred  by him. 

11. Deduction on Expenditure by way of payments to associations and institutions for carrying out Rural  Development Programmes [Section 35CCA]  - for computing Profit & Gains of Business or Profession

Under section 35CCA, any assessee who is carrying on a business/profession shall be allowed a  deduction of the amount of the expenditure incurred by way of payment of any sum: 

(a)           to National Fund for Rural Development set up by the Central Government; 

(b)          to the National Urban Poverty Eradication Fund set up and notified by the Central  Government. 

12. Weighted Deduction of 150% for expenditure incurred on Agricultural Extension Project  [Section 35CCC]  - for computing Profit & Gains of Business or Profession

1. To whom deduction shall be allowed u/s 35CCC:

Any assessee 

2. Purpose for which deduction shall be allowed:

Deduction shall be allowed on account of any  expenditure incurred by the assessee on agricultural extension project notified by the Board in this  behalf in accordance with the guidelines as may be prescribed 

3. Quantum of deduction:          

150% of such expenditure incurred during the previous year 

4. Deduction not to be allowed under any other section if claimed under this section:

Where a  deduction under section 35CCC is claimed and allowed for any assessment year in respect of such  expenditure, deduction shall not be allowed in respect of such expenditure under any other provisions  of this Act for the same or any other assessment year. 

13.        Weighted deduction of 150% for Expenditure incurred by a company on Skill Development  Project [Section 35CCD]  ]  - for computing Profit & Gains of Business or Profession

1. To whom deduction shall be allowed u/s 35CCC:

A company assessee only 

2. Purpose for which deduction shall be allowed:

Deduction shall be allowed on account of any  expenditure (not being expenditure in the nature of cost of any land or building) incurred by the  company on skill development project notified by the Board in this behalf in accordance with the  guidelines as may be prescribed 

3. Quantum of deduction:

150% of such expenditure incurred during the previous year 

4. Deduction not to be allowed under any other section if claimed under this section:

Where a  deduction under section 35CCD is claimed and allowed for any assessment year in respect of such  expenditure, deduction shall not be allowed in respect of such expenditure under any other provisions  of this Act for the same or any other assessment year. 

14. Amortisation of certain Preliminary Expenses [Section 35D and Rule 6AB]  - for computing Profit & Gains of Business or Profession

Assessees who can claim deduction under this section are: 

(i)            Indian Company, or 

(ii)           a person other than a company who is resident in India. 

Expenditure in respect of which deduction is available 

(a)           expenditure incurred before the commencement of business; or 

(b)          expenditure incurred after the commencement of business in connection with the extension  of existing undertaking or in connection with setting up a new unit. 

Expenses qualifying for deduction:

The following expenses qualify for deduction: 

(a)           Expenditure incurred in connection with: 

(i)            preparation of a feasibility report; 

(ii)           preparation of a project report; 

(iii)          conducting market survey or any other survey necessary for the business of the assessee; 

(iv)          engineering services relating to the business of the assessee; 

(b)          legal charges for drafting any agreement between the assessee and any other person relating  to the setting up or conduct of the business of the assessee; 

(c)           where the assessee is company, also, expenditure— 

(i)            by way of legal charges for drafting the Memorandum and Articles of Association of the  company; 

(ii)           on printing of the Memorandum and Articles of Association; 

(iii)          by way of fees for registering the company under the provisions of the Companies Act,  1956; 

(iv)          in connection with the issue, for public subscription, of shares in or debentures of the  company, being underwriting commission, brokerage and charges for drafting, typing,  printing and advertisement of the prospectus; 

(d)          such other items of expenditure (not being expenditure eligible for any allowance or  deduction under any other provisions of this Act) as may be prescribed. 

Amount qualifying for deduction:

The aggregate of the expenditure referred to in clauses (a) to  (d) above shall not exceed 5% of the cost of the project in case of all assessees other than companies.

In the case of a company, it cannot exceed 5% of— 

(i)            the cost of the project, or 

(ii)           the capital employed in the business of the company, 

whichever is beneficial to the company. 

Quantum of deduction:

The amount qualifying, as per the limits specified above, shall be  allowed as a deduction in 5 equal annual instalments beginning with the previous year of  commencement of business or the previous year in which the extension of undertaking is completed  or the new unit commences production or operation. 

Compulsory audit of accounts:

No deduction shall be admissible under this section in case of  assessees other than a company or cooperative society unless the accounts of the assessee for the year  or years for which the expenditure specified above is incurred have been audited by a chartered  accountant and the assessee furnishes alongwith his return of income for the first year in which the  deduction under this section is claimed, the report of such audit in the prescribed form i.e. Form 3AE  duly signed by such Chartered Accountant.

15. Amortisation of expenditure in case of Amalgamation Or Demerger [Section 35DD]  - for computing Profit & Gains of Business or Profession

Where an assessee, being an Indian company, incurs any expenditure, wholly and exclusively for  the purpose of amalgamation or demerger of an undertaking, the assessee shall be allowed a  deduction of an amount equal to 1/5th of such expenditure for each of five successive previous years  beginning with the previous year in which the amalgamation or demerger takes place. No deduction  shall be allowed in respect of the expenditure mentioned above under any other provision of the Act. 

16. Amortisation of expenditure incurred under Voluntary Retirement Scheme [Section 35DDA]  - for computing Profit & Gains of Business or Profession

Where an assessee incurs any expenditure in any previous year by way of payment of any sum to  an employee in connection with his voluntary retirement, in accordance with any scheme or schemes  of voluntary retirement, 1/5th of the amount so paid shall be deducted in computing the profits and  gains of the business for that previous year, and the balance shall be deducted in equal instalments for  each of the four immediately succeeding previous years. No deduction shall be allowed in respect of  such expenditure under any other provision of the Income-tax Act. 

17. Deduction for expenditure on Prospecting, etc., for Certain Minerals [Section 35E and Rule  6AB]  - for computing Profit & Gains of Business or Profession

Where an assessee, being an Indian company or a person (other than a company) who is a  resident of India, is engaged in any operations relating to prospecting for, or extraction or production  of specified minerals (mentioned in Seventh Schedule) and incurs, after the 31st day of March, 1970,  any specified expenditure, the assessee shall be allowed to amortise such expenditure.

Quantum of deduction:

The deduction to be allowed for any relevant previous year shall be: 

(a)           an amount equal to 1/10th of the expenditure (hereinafter referred to as the instalment); or 

(b)          such amount as is sufficient to reduce to nil, the income (as computed before making the  deduction under this section) of that previous year arising from the commercial exploitation  of this mine or any other mine, or other natural deposit of mineral in respect of which the  expenditure was incurred, 

whichever amount is less. 

Compulsory Audit of Accounts [Section 35E(6)] 

Where the assessee is a person other than a company or a co-operative society, no deduction shall  be admissible under section 35E(1) unless the accounts of the assessee for the year or years in which  the expenditure specified in section 35E(2) is incurred have been audited by an accountant and the  assessee furnishes, along with his return of income for the first year in which the deduction under this  section is claimed, the report of such audit in the Form 3AE duly signed and verified by such  accountant and setting forth such particulars as may be prescribed. 

18. Other Allowable Deductions [Section 36]  - for computing Profit & Gains of Business or Profession

Deductions which are specified u/s 36 include the following: 

1.            Insurance premium of stocks [Section 36(1)(i)]:

2.            Insurance premium of cattle [Section 36(1)(ia)]:

3.            Insurance on health of employees [Section 36(1)(ib)]:

4.            Bonus or Commission to employees [Section 36(1)(ii)]:

5.            Interest on borrowed capital [Section 36(1)(iii)]:

6.            Discount on issue of Zero Coupon Bonds to be allowed as Deduction on Pro Rata basis [Section 36(1)(iiia)]

7.            Employer's contribution to a Recognised Provident Fund or Approved Superannuation Fund [Section 36(1)(iv)]

8.            Employer's contribution towards a Pension Scheme [Section 36(1)(iva)]

9.            Employer's contribution to an Approved Gratuity Fund [Section 36(1)(v)]

10.          Sums received from employees towards certain welfare schemes if credited to their accounts before the due date [Section 36(1)(va)]

11.          Allowance in respect of dead or permanently useless animals [Section 36(1)(vi)]

12.          Bad Debts [Section 36(1)(vii)]

13.          Provision for Bad and Doubtful Debts of a certain banks and financial institutions [Section 36(1)(via)]

14.          Amount credited to Special Reserve credited and maintained by Special Entity. [Section 36(1)(viii)]

15.          Expenditure on promoting Family Planning amongst the employees [Section 36(1)(ix)]

16.          Securities Transaction Tax paid to be allowed as Deduction [Section 36(1)(xv)]

17.          Commodity Transaction Tax to be allowed as a Deduction [Section 36(1)(xvi)]

19. General Deductions [Section 37(1)] – Allowed for computing  Profit & Gains of Business or Profession

Any Expenditures subject to the following conditions shall be allowed as Deduction in computing the income chargeable under the head "Profit and Gains of Business or Profession".

(i)            Such expenditure should not be covered under the specific sections, i.e. sections 30 to 36. 

(ii)           Expenditure should not be of capital nature. 

(iii)          The expenditure should have been incurred during the previous year. 

(iv)          The expenditure should not be of a personal nature. 

(v)           The expenditure should have been incurred wholly or exclusively for the purpose of the  business or profession.

Examples of Expenditures allowable as a Deduction U/s 37(1) – for computing Profit and Gains of Business or Professions.

1.     Remuneration to Employees U/s 37(1):

Salary and perquisites paid to the employees of the assessee are  allowable as a deduction.

However, salary paid to the proprietor of the business is an appropriation of  profit and shall not be allowed as deduction. Compensation paid to the employees in connection with  the termination of employment on ground of commercial expediency is also allowable. Salary paid by  a firm to its partners is allowed as deduction subject to certain limits and conditions.

2.     Payment of Penalty / Damages U/s 37(1):

Penalty is normally levied for breach of law and are, therefore,  generally not allowable as deduction.

However, at times an amount though termed as penalty, is  purely compensatory in nature. For example, damages, penalty or interest paid for delay in  completion of a contract, though termed as penalty are really in the nature of a compensatory payment  and are therefore, allowable as a deduction.

However, penalties paid to customs authorities, sales-tax  authorities, income-tax authorities, etc for infringement of law are not allowed. Levy for failure to pay  sales tax within time is partly compensatory and partly penal, compensatory part is allowable and  penal part is disallowable. 

3.     Legal Expenses U/s 37(1):

All legal expenses, incurred in connection with the business or profession of the  assessee, are allowable, irrespective of the result of the legal proceedings.

However, legal expenses on  criminal prosecution are not deductible, as they are not incidental to the business or profession. 

Legal expenses to defend or maintain the title to a capital asset of the assessee's business are  allowable, but expenses to acquire a title are not allowable because they are of a capital nature. 

Similarly,

-      litigation expenses for protecting the trade or business and for protection of assessee's trade  mark are allowed.

-      Legal and court expenditure spent for preparation and pursuing income-tax appeals  are allowable expense. 

4.     Expenditure on Raising Loans U/s 37(1):

Expenses of various types incurred in connection with raising of  loans, for the purposes of the business, are allowable as a deduction. Therefore, legal charges for  obtaining the loans from financial institutions, legal charges for drafting various deeds, brokerage  paid for raising loans, stamp and registration charges, shall be allowed as deduction. 

5.     Interest U/s 37(1) :

While Section 36(1)(iii) makes a specific provision for allowing a deduction in respect  of interest on money borrowed for the purpose of business, other kinds of interest payments in respect  of interest do not fall under that Section. If these payments have been made wholly and exclusively  for the purposes of business, they can be allowed u/s 37(1). Some of these could be: 

(i) interest on deferred payment for purchase of assets; 

(ii) interest on delayed payment of electricity charges; 

(iii) interest on purchase price of raw material; 

(iv) any amount paid 'in lieu of interest' in compromising a dispute with a trade creditor. 

6.     Expenditure on Advertisement U/s 37(1) :

Any expenditure incurred during the previous year on  advertisement for the purpose of business and profession shall be allowed as deduction.  Expenditure incurred for sports tournaments organised, which directly result in publicity and  advertisement of the assessee and its products, qualify for deduction.  Expenditure incurred on putting up stall in exhibition organised in connection with centenary  celebrations of Congress Party was held by the Tribunal to be expenditure on advertisement. 

7.     Expenses allowable under specific instructions of CBDT U/s 37(1) 

(i)            Diwali and Mahurat expenses. 

(ii)           Payment for telephone/telex connection. 

(iii)          Payment to Registrar of Companies: The fee paid to the Registrar of Companies are in  connection with the company's legal obligations to be discharged under the Company law  and are an essential part of the company's business activities and are therefore, allowed. 

(iv)          Annual listing fee: Annual listing fee paid to a stock exchange is allowable. 

(v)           Professional tax by the business assessee.