Section 21 Flashcards
A company pays Rs. 60,000 in cash for office supplies. Is this deductible?
No, cash payments exceeding Rs. 50,000 at a time are non-deductible unless it falls under an exception (e.g., payment to a farmer).
A worker without PAN is paid Rs. 4,000 in wages. Is this deductible?
No, wages paid to employees without PAN are non-deductible if they exceed Rs. 3,000 at a time.
A business pays Rs. 2,500 for an invoice without PAN. Is this deductible?
No, expenses against invoices exceeding Rs. 2,000 without PAN are non-deductible.
A company spends Rs. 1,00,000 on a feasibility study for a new project. Is this deductible?
No, capital expenses like feasibility studies are non-deductible.
A business pays Rs. 30,000 in cash as monthly remuneration. Is this deductible?
No, monthly remuneration exceeding Rs. 25,000 must be paid through the bank to be deductible.
A company pays Rs. 5,000 to collect house rental income. Is this deductible?
No, expenses incurred to collect tax-exempt income are non-deductible.
A business pays Rs. 10,000 as a fine for violating traffic rules. Is this deductible?
No, fines or penalties for violating laws are non-deductible.
A company pays Rs. 40,000 in cash to a farmer for agricultural products. Is this deductible?
Yes, payments to farmers for primary agro-products are exceptions to the Rs. 50,000 cash payment rule.
A business pays Rs. 2,000 for education directly related to its operations. Is this deductible?
Yes, education expenses directly related to business or investment are deductible.
A company pays Rs. 15,000 for clothes required only during work hours. Is this deductible?
Yes, clothing expenses required for work are deductible.
A business pays Rs. 55,000 in cash in an area with no banking services. Is this deductible?
Yes, cash payments exceeding Rs. 50,000 are deductible if banking services are unavailable within a 10 km radius.
A company pays Rs. 1,000 for an invoice without PAN. Is this deductible?
Yes, expenses against invoices up to Rs. 2,000 without PAN are deductible.
A business pays Rs. 20,000 as retirement contribution. Is this deductible?
Yes, retirement contributions are deductible.
A company spends Rs. 50,000 on acquiring machinery with a useful life of 5 years. Is this deductible?
No, capital expenses for acquiring property with a useful life of more than 12 months are non-deductible.
Wages Rs. 5000 paid to a foreigner who stayed in Nepal for 1 day
Travelling expense of employee
