Disallowance of Certain Expenses and Payments - (New) Section 94 / (Old) Section 58

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....ts made outside India are not deductible unless applicable tax has been deducted or paid under Chapter XIX-B. Section 94(2) - Application of business deduction provisions the applicability of certain provisions used in business income computation to income under "Income from Other Sources", specifically apply here as they do for business income computation. • Sections 29 - Deduction relation to Empolyee welfare • Section 35(b)(i) - Fails to deduction of TDS while payment to resident • Section 36 - Deduction condition specified for expenses or payments not deductible in certain circumstances Section 94(3) - Application of Business Income Computation Rules to Foreign Companies' In....

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....(a)(i): Personal Expenses of the Assessee Any expenditure that is personal in nature cannot be claimed as a deduction while computing income from other sources. Section 58(1)(a)(ii): Interest Payable Outside India Without TDS Compliance Interest payable outside India is not deductible if: • it is chargeable under the Income-tax Act; and • tax has neither been deducted at source nor paid in accordance with Chapter XVII-B. Section 58(1)(a)(iii): Salary Payable Outside India Without TDS Compliance Any payment chargeable under the head "Salaries" and payable outside India is not deductible unless: • tax has been paid on such salary; or • tax has been deducted at source under Cha....

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....ditions of Section 57 but also the restrictive provisions of Section 40A, as made applicable through Section 58(2). Section 58(3) - Applicability of Section 44D to Foreign Companies in Computing Income from Other Sources By incorporating Section 44D into the computation of income from other sources: • The special taxation regime applicable to foreign companies continues to apply even when the income is not assessed as business income. • Foreign companies cannot claim deductions under Section 57 that would otherwise defeat the purpose of Section 44D. Section 58(4) - No Deduction Against Lottery and Gambling Winnings Section 58(4) establishes a strict rule that income from lotteries, crossword puzzle....