Expenses Disallowed (Section 40) The following amounts shall not be deducted in computing the income chargeableunder the head "profits andgains of business or profession: i. Interest, royalty, fees for technical services payable outside India ii. TDS not deducted on certain payments: iii. Rate or Tax Paid on Profits: S26 iv. Wealth Tax [Section 40a(iia)]: V. Amount paid by way royalty, license fee, service fee privilege fee, service charge by State Government undertaking to State Government. vi. Salaries [Section 40a(iii)]: Any payment which is chargeable under the head "salaries" if It is payable-a)outside India; orbito anon-resident vii. Payment to provident Funds etc: Any payment to a Provident Fund or other fund established for the benefit of employees of the assessee would be disallowed increases where the assessee (employer) has not made effective arrangements to secure deduction of tax at source from any payment made from the fund which are chargeable to tax under the head 'salaries in the hands of the employees. viii. Payment of tax on non-monetary perquisites [Section 40a(v)]: ix. Payment to Partners by a firm (Discussed under the chapter Assessment of firms). x. Payment by AOPs / BOIs (Discussed under the chapter assessment of AOP BOI) Illustration The net profit of business of Mr. Vijayan as disclosed by its profit and loss account were Rs. 325000 after charging the following. a. Municipal taxes on house property let out 3000 b. Bad debts written off 15000 c. Provision for doubtful debts 16000 d. Provision for taxation 15000 e. Depreciation 25000 f. Depreciation allowable 20000 Ascertain taxable business profit