Allowed Exppenditures !!

1. Any expenses purely relating to your business will be allowed by the income tax act.
2. A part from 80C there are other deductions such as

• Mediclaim Premium u/s 80D to the tune of Rs.15,000 if the insured is not a Senior Citizen & Rs.20,000 if the insured is a Sr. Citizen.
•  Donation to any institution who has a 12A registration can be allowed as deduction u/s 80G with certain restriction.
• Interest on loan repayment taken for higher education u/s 80E.
• Sec 80DD Expenditure on Handicapped dependent.
• Sec 80DDB Expenditure on Specified Diseasees.

There are much more deductions which depends on as the case may be. The above are some of the commen deductions available to individual assessee.

Regards

Ram. 

Thanks Ram,

I am clear about the second question... 

Now About, "Any expenses purely relating to your business will be allowed by the income tax act" ..
can you be more specific and is there any list I can refer to or any website in which i can understand what all is included and what is not?

Moreover, I have a clerk working for me whom i pay 3k per month by CASH, can i show it as expense, if yes, than is there any document i need to produce as a proof....

FOR SALARY, U CAN USE SALARY REGISTER, SIGNED BY EMPLOYEE,  deduct profession tax and deposit to p tax department on salary.