Deductible Business Expenditure Quiz

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12 Questions

What type of expenditure is deductible under section 37?

Revenue expenditure

Which of the following payments is considered deductible?

Demurrage paid to port authorities

What is the tax treatment for expenses on providing freebies to medical practitioners?

Not deductible

Under which condition can a tenant get depreciation on capital expenditure for a leased building?

If the tenant uses the building for business/profession during the previous year

What is the maximum limit for Indian companies to claim a deduction on eligible expenditure under the specified criteria?

Higher of 5% of Project Cost or Capital

Which of the following is NOT considered as part of the eligible expenditure for setting up a new business by new companies?

Expenses for Expansion of Business

Under what condition is Compulsory Audit required for the financial year in which expenditure is incurred?

If the company incurs eligible expenditure

What type of expenses are deductible if capitalized in the books of accounts for claiming a deduction under section 35AD?

Capital Expenditure on developing infrastructure facilities

What will happen to any expenditure for acquisition of an asset if aggregate payments made to a person in a day exceed Rs. 10,000?

It shall not be included in the cost of the asset.

Which priority is followed for set-off in subsequent assessment years according to the text?

PY Depreciation, B/f Business Loss, Unabsorbed Depreciation

In the case of second-hand assets, what criteria might the Assessing Officer use to determine the actual cost of the asset?

Both a and b

What happens to the actual cost of a building used for non-business purposes earlier according to the text?

It remains the same.

Test your knowledge on deductible business expenditure with this quiz. Understand the criteria for expenditure to be considered deductible, the types of expenses that qualify, and important circulars related to business expenditure. Explore scenarios where business expenses can and cannot be deducted for tax purposes.

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