Section 34 — General conditions for allowable deductions

(1) Any expenditure (not being an expenditure of the nature specified in
sections 28 to 33, 44 to 49, 51 and 52 and not being in the nature of capital
expenditure or personal expenses of the assessee), laid out or expended wholly
and exclusively for the purposes of the business or profession shall be allowed in
computing the income chargeable under the head “Profits and gains of business or
profession”.
(2) For the purposes of sub-section (1), an expenditure laid out or expended wholly
and exclusively for business or profession by the assessee shall not include any of
the following:—
( a) an expenditure incurred for any purpose which is an offence or is pro -
hibited by law; or
( b) an expenditure incurred on the activities relating to corporate social
responsibility referred to in section 135 of the Companies Act, 2013
(18 of 2013); or
( c) an expenditure incurred on advertisement in any souvenir, brochure,
tract, pamphlet or the like, published by a political party.
(3) The expenditure mentioned in sub-section (2)( a) shall include expenditure
incurred for—
( a) any purpose which is an offence under, or is prohibited by, any law in
force in or outside India; or
( b) providing a benefit or perquisite in any form to a person, who may or
may not be carrying on a business or exercising a profession, when its
acceptance by the person is in violation of any law or rule or regulation
or guideline governing the conduct of that person; or
( c) compounding an offence under any law in force in or outside India; or
( d) settling proceedings initiated in relation to contravention under any law
notified by the Central Government in this behalf.