Section 94 — Amounts not deductible

(1) Irrespective of anything contained in section 93, the following amounts
shall not be deductible in computing the income of any assessee chargeable
under the head “Income from other sources”:—
( a) any personal expenses of the assessee; or
( b) any interest chargeable under this Act, payable outside India, on which
tax has not been paid or deducted under Chapter XIX-B; or
( c) any payment chargeable under the head “Salaries”, if it is payable outside
India, unless tax has been paid or deducted under Chapter XIX-B.
(2) The provisions of sections 29, 35( b)(i), and 36 shall apply in computing the
income chargeable under the head “Income from other sources” as they apply in
computing the income chargeable under the head “Profits and gains of business
or profession”.
(3) For an assessee, being a foreign company, the provisions of section 59 shall apply
in computing the income chargeable under the head “Income from other sources”,
as they apply in computing the income chargeable under the head “Profits and gains
of business or profession”.
10c. Substituted by the Finance Act, 2026, w.e.f. 1-4-2026. Prior to its substitution, sub-section
(2) read as under :
“(2) In respect of—
( a) dividend income of the nature referred to in section 2(40)(f), no deduction shall be
allowed;
( b) any other dividend income [other than in clause ( a)], or income from units of a
Mutual Fund specified under Schedule VII (Table: Sl. No. 20 or 21) or income
from units of a specified company as referred to in section 2(h) of the Unit Trust of
India (Transfer of Undertaking and Repeal) Act, 2002 (58 of 2002), only deduction
allowed shall be interest expense which, for any tax year, shall be limited to 20% of
such income (included in the total income for that year, without deduction under
this section).”
(4) In computing the income from winnings from lotteries, crossword puzzles, races
including horse races, card games and other games of any sort, or from gambling
or betting of any form or nature, no deduction for any expenditure or allowance
related to such income shall be allowed under this Act.
(5) Sub-section (4) shall not apply in computing the income of an assessee, being the
owner of horses maintained for running in horse races, from the activity of owning
and maintaining such horses.
(6) For the purposes of this section, the expression “horse race” means a horse race
upon which wagering or betting may be lawfully made.