==Profession and Business Income in India==
==What is the meaning of Business & Profession as per Income Tax Act ?==
* ‘Business’ may be defined as any trade, commerce or manufacturing activity. ‘Profession’ may be defined as a vocation, or a job requiring some thought, skill and special knowledge like that of C.A., Lawyer, Doctor, Engineer, Architect etc.
==What expenses can be claimed as deductible expense==
* Rent, Rates, Taxes, Repairs and Insurance of Premises/Buildings.
* Repairs and Insurance of Plant and Machinery, Furniture.
Depreciation on Building, Machinery, Plant & Furniture owned by the Assessee.
* Insurance Prem. Paid for Stock&/or Stores.
* Insurance Premium paid towards Health Insurance Scheme of Employees.
* Interest paid on borrowed Capital for Business/Profession.
PF & Superannuation Fund contribution, approved Gratuity contribution, only if paid before due dates and not on accrual basis.
* Bad Debts written-off as irrecoverable.
* Bonus & Commission paid to Employees.
* The following expenditures are allowed, if incurred, for furtherance of business without any limit:
(e) Maintenance of Guest House
* Note: Any payment above 20,000 should be made only by Account Payee Cheque/DD. Otherwise, 20% of such expenditure will be disallowed subject to exceptions.
* Limit for making payments for purchases/expenditure, otherwise than by an Account payee cheque/draft, raised to Rs.35,000 in case of payments for plying, hiring or leasing goods carriages.