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of <h1>Board Highlights Inconsistencies in Foreign Tour Expenses u/s 37(3) of Income Tax Act; Deductibility Criteria Clarified.</h1> The Board has identified inconsistencies in the treatment of expenses on foreign tours under Section 37(3) of the Income Tax Act, 1961. Such expenses by company directors, partners, or employees are generally for studying industry developments, exploring export opportunities, purchasing machinery, or attending conferences. The key consideration for deductibility is whether the expenditure creates new assets or simply enhances company profits. If it enhances profitability without creating new assets, it may qualify for deduction under Section 37(1). However, compliance with the limits set by Rule 6D of the Income Tax Rules, 1961, is necessary. These instructions should be communicated to relevant officers.
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