Personal expenses and refresh expenses for it

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This discussion clarifies the tax deductibility of personal and refreshment expenses for businesses. While personal expenses are generally not allowed, refreshment expenses may be deductible up to a certain limit. It's important to note that allowances for employee meals, like tiffin or lunch, are typically fully taxable in the employee's hands.

Kollipara Sundaraiah

Kollipara Sundaraiah (Querist)

16 September 2021 Sir,
It assess net profit as per profit and loss account rs:5,50,615/-in f.y.20-21
Add: estimated personal expenses rs:10,000/-(personal expenses rs:1,50,000/- debited to capital account
Add:sadar (refreshment) expenses rs:5200/-debited to profit and loss account.
Total taxable income rs:5,65,815/-show in itr in f.y.20-21.
Question:
Assess sadar( refreshment) expenses and personal expenses not allowed in it act.

Dhirajlal Rambhia

Dhirajlal Rambhia

(Expert)

17 September 2021 For any business entity, any personal expenses not allowed, but refreshment expenses allowed to certain limit.

Kollipara Sundaraiah

Kollipara Sundaraiah (Querist)

17 September 2021 limit for refreshment expenses in it act

Dhirajlal Rambhia

Dhirajlal Rambhia

(Expert)

17 September 2021 The answer provided is for business expenditures, not the same in employees hand.
For employee any Tiffin/Lunch/Dinner /Refreshment Allowance given is fully taxable.

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