Deductibility of business expenditure disallowed where tax at source or equalisation levy is not deducted or paid. Section 40 disallows deductions for business or professional expenses where tax withholding or equalisation levy obligations have not been complied with: interest, royalties, technical fees and other specified payments to non-residents or certain residents are not deductible unless tax or levy is deducted and paid, with deduction allowed in the year payment of the tax/levy occurs. The section also disallows deductions for fringe benefit tax, taxes on profits, wealth-tax and certain sums levied or appropriated by State Government undertakings, and contains specific limits and conditions governing partner/member remuneration and interest for firms and associations.