business profession

Section 37(1) of Income tax Act is a General section which allows deductions to the Assessee which are not covered under Section 30 to 36.

For a Expenditure to be allowable u/s 37(1) it shiuld satisfy certain comditions

1. It should not be covered under Sec. 30 to 36
2. Expenditure should be of revenue nature
3. Exoenditure should be incurred in Previous Year
4. It should not be personal expenditure
5. It should be wholly or partly related to business.

Section 37 says any expense (which are not specified with in section 30 to 36 )incurrred exclusivily for the particular business can also deduct provided it not in the nature of capital expenditure.The logic behind this section is that it is not possible to define all expenses in IT Act . Hence any expenses which are related to the particular business , not a capital expenditure ( purchase of asset)can be deducted from the income.