Comparison of Section 35 'Amounts not deductible in certain circumstances' between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)

Non-deductibility for unpaid withholding taxes: deductions denied until the required tax or equalisation levy is paid.

Section 35 conditions deduction of business or professional expenses on compliance with withholding and levy obligations: where tax or equalisation levy required to be deducted or paid is not timely deducted/paid, a specified portion of the payment is disallowed in the year of non-compliance and is allowed only in the year when the tax or levy is actually deducted and paid; parallel deeming rules and provisos address later deduction/payment and certain default scenarios, while partnership and association rules restrict deduction for unauthorised or excessive partner/member remuneration and interest.