Bribe claiming as deduction u/s 37
This query is : Resolved
24 March 2012
Why Cannot you Claim Bribe Paid as Deduction under Sec 37 of Income Tax Act 1961?
Justify your answers with a reference to necessary statues.
Justify your answers with a reference to necessary statues.
24 March 2012
This is because of Explanation 1 to Section 37 which provides as under:
For the removal of doubts, it is hereby declared that any expenditure incurred by an assessee for any purpose which is an offence or which is prohibited by law shall not be deemed to have been incurred for the purpose of business or profession and no deduction or allowance shall be made in respect of such expenditure
Since giving a bribe is prohibited by law, it is not allowed as deduction.
For the removal of doubts, it is hereby declared that any expenditure incurred by an assessee for any purpose which is an offence or which is prohibited by law shall not be deemed to have been incurred for the purpose of business or profession and no deduction or allowance shall be made in respect of such expenditure
Since giving a bribe is prohibited by law, it is not allowed as deduction.
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04 April 2012
Thank you for the reply..
04 April 2012
You are welcome.
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