[Section 40(b)] : Expenses Expressly Disallowed In General Cases

The followings are the expense, allowances and losses which are also not allowed as deduction while computing income under the head ‘profits and gains of business or profession’

(i) Drawings private or personal expenses of the proprietors partners etc.

(ii) Any expenditure in the nature of capital expenditure.

(iii) The amount paid as charity and presents. However, subscripttion is allowed.

(iv) Any provision or reserve except the special reserve of the approved financial corporations.

(v) Past losses (i.e., loss of the past previous years) charged to profit and loss account.

(vi) Any expenditure incurred by an assessee for any purpose which is an offence or which is prohibited by any law, shall not be allowed to be debited as business expenditure out of any income. This amendment has been made by the Finance Act (2) 1998 with retrospective effect from 1-4-1962.

(vii) Any other expenditure which was incurred not necessarily, wholly and exclusively for the purposes of the business or profession of the assessee.

(viii) Any provision for bad debts, taxation etc.

(ix) Depreciation in excess of the admissible amount under the provisions of the Income-tax Act, discussed in the next chapter.