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Which one of the following items is not allowed as deduction while computing income from business and profession ? 

Which one of the following items is not allowed as deduction while computing income from business and profession ?  Correct Answer Fees paid to the lawyer for drafting partnership deed

Fees paid to the lawyer for drafting the partnership deed are not allowed as a deduction while computing income from business and profession. Hence Option1 is incorrect and hence selected.

  • Loss due to embezzlement by an employee: Assessee is eligible for the deduction of the amount embezzled by the employee as a trading loss u/s 28 of the Income Tax Act.
  • All legal expenses, incurred in connection with the business or profession of the assessee, are allowable, irrespective of the result of the legal proceedings. Legal expenses paid to protect the building of the business are allowable as a deduction.
  • Payment for telephone/telex connection is an expense allowable under specific instructions of the Central Board of Direct Taxes (CBDT).

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Reason (R): If tax has not been deducted at source, the amount paid as interest will not be allowed as a deduction in computing business income.
Select the correct answer:
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