Which of the following expenses debited to Profit and Loss a/c but disallowed while computing income…
While computing income under the head Profits and Gains of Business or Profession, general expenses incurred wholly and exclusively for the business are allowable under…
Choose your answer
Which of the following expenses debited to Profit and Loss a/c but disallowed while computing income from business?
I. General expenses
II. Personal expenses
III. Expenses of Income which is taxable under the other heads of income
IV. Charities and donations
Answer and explanation
Correct answer B
While computing income under the head Profits and Gains of Business or Profession, general expenses incurred wholly and exclusively for the business are allowable under Section 37(1). Personal expenses, expenses relating to income taxable under other heads, and charities and donations debited to the Profit and Loss account are disallowed and added back.
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UGC NET Commerce