Business expense deductibility limited by purpose test; disallowed for unlawful payments, CSR outlays, and political party advertising.

Section 34 conditions deduction of business or professional expenditure on the test that it is not capital or personal and is laid out or expended wholly and exclusively for business or profession. Deductions are disallowed for expenditure connected with offences or prohibited by law, corporate social responsibility outlays mandated by corporate law, and advertising in political party publications; the prohibited-expenditure category includes payments linked to illegal acts, unlawful benefits to recipients, compounding offences, and settling notified contravention proceedings.

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