Income from Business or Profession

Chargeability S. 28:

Profits and gains of business or profession. Any compensation recd by a person in connection with termination or modification of a contract. Profit on sale of import entitlements Value of any benefit or perquisite arising from business or profession. Any interest, salary, bonus or commission or remuneration recd by a partner from firm. Any sum recd by a keyman insurance policy.

Speculation business

It is a business in which a contract for purchase or sale of any commodity including stocks and shares is periodically or ultimately settled otherwise than by actual delivery or transfer of the commodity or scrips.

Admissible deductions :
Sec. 30- expenses relating to building Sec. 31 expenses relating to plant, machinery and furniture. Sec. 32- depreciation

Depreciation
Sec.32(1) is mandatory. Assessee must be the owner. Must use the asset. Should fall within the eligible class of assets. Concept of Block of assets.

Block of assets :
Tangible assets buildings, machinery, plant and furniture. Intangible assets know-how, patents, copyrights, trade marks, licences, franchises or any other business or commercial rights of similar nature.

Actual Cost:
Invoice amount Less discounts Subsidy Int on loan for acquiring the asset upto the date of commencement of asset. Expenses for acquiring the asset freight Installation of the asset.

Wdv:
Opening value Add cost acquired Less sale money Wdv for dep Depreciation at % Closing value of the block.

Sec 35D : Preliminary Expenses

Legal expenditure Report preparation cost Registration or incorporation Expenses in connection with issue of shares. Deduction is over 5 years after starting the company.

Other deductions Sec.36(1):

Insurance premium of stock Insurance premium of employees. Bonus or commission paid to employees. Interest paid in respect of capital borrowed. Discount on ZBB on pro-rata basis. Contribution to RPF Contribution to gratutity fund. Bad debts conditions applicable.

General expenses Sec. 37

Other than covered under 30 to 36 Not in nature of capital expenditure. Not personal expenditure. Laid out wholly or exclusively for the purpose of the business or profession. Expenditure being an offence.