Disallowance of expenditure: amendment clarifies non-deductibility extends to offences abroad, unlawful perks, and compounding payments.

The amendment inserts Explanation 3 into section 37(1) to clarify that expenditures incurred for purposes that are offences or prohibited by law-including offences under foreign law, benefits or perquisites whose acceptance breaches governing rules, and payments to compound offences-are excluded from deduction under the general allowability rule.

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