Understanding "Actual Cost" Under Section 43 for Business Assets and Specific Payment Exclusions Over 10,000

Section 43 of the Income Tax provisions defines terms related to income from profits and gains of business or profession (PGBP). The "actual cost" of an asset is defined as the cost to the taxpayer minus any portion covered by others. If a motor vehicle is used for non-business purposes and costs over 25,000, the excess is ignored. Payments over 10,000 made outside banking channels are excluded from the asset's actual cost. For capital assets with deductions under section 35AD, the cost is treated as nil. Assets acquired through distribution, liquidation, gift, or trust have specific cost considerations.