Business deductions clarify allowable expenses, limiting interest capitalization and setting conditions for reserves and bond discounting.
Clause 32 specifies allowable business deductions including bona fide bonuses or commissions, capitalization of interest until asset use, pro rata discount deduction for zero coupon bonds, conditional deductions for contributions to credit guarantee funds and statutory corporation expenditures, limits on special reserves for financial entities, deduction of marked to market losses under prescribed standards, phased family planning capital deductions, agricultural purchase deductions within government price limits, animal loss adjustments, and transaction tax deductions where trading forms part of business income.

Business income deductions clarified and modernized, expanding allowable items and tightening conditions for claiming them.
Clause 32 prescribes a list of allowable other deductions for business income computation, covering employee bonuses and commissions, interest on borrowed capital (with exclusions until assets are in use), contributions to specified credit guarantee funds, pro rata discount on zero coupon instruments, amounts carried to special reserves by defined financial entities, non-capital expenditure by notified statutory corporations, cooperative society purchase expenditure, marked to market or expected losses, family planning expenditures by companies, cost of animals used in business adjusted for carcass receipts, and transaction taxes where income is included in business profits.