General Deductions-Section 37

[Poornima Gupta]

Section 37 - General - Income-tax Act, 1961 

(2B) Notwithstanding anything contained in sub-section (1), no allowance shall be made in respect of expenditure incurred by an assessee on advertisement in any souvenir, brochure, tract, pamphlet or the like published by a political party.

Q. Why such expenditure is not allowed under IT Act?

[Padmanathan KV]

Poornima Gupta, I think because deduction is given under section 80GGC in respect of contribution to political parties, the disallowance in Sec. 37 may be to prevent double benefit of the same.

AI Summary

Restriction on deductions for political advertising prevents duplicative tax benefit where contributions to parties are deductible. Section 37(2B) denies allowance for expenditure on advertisement in souvenirs, brochures, tracts, pamphlets or similar publications published by a political party, excluding such advertising costs from general business deductions to prevent duplicative tax benefit where contributions to political parties receive separate tax treatment.