Deduction in resect of illegal income
This query is : Resolved
14 October 2013
Whether we include a illegal income in our part of income nd can claim deduction in respect of such income
14 October 2013
per income tax, there is no illegal income. So it is to be included in your total Income. with regards to expenses incurred to earn illegal income please refer to explanation to Section 37(1):
"it is hereby declared that any expenditure incurred by an assessee for any purpose which is an offence or which is prohibited by law49a 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.]"
Thus any illegal expense won't be allowed.
The exception is that illegal expense to earn income from other sources may still be allowed as Section 37 doesn't extent to section 56/57.
"it is hereby declared that any expenditure incurred by an assessee for any purpose which is an offence or which is prohibited by law49a 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.]"
Thus any illegal expense won't be allowed.
The exception is that illegal expense to earn income from other sources may still be allowed as Section 37 doesn't extent to section 56/57.
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