Clause 12 - Amendment of section 37 - Finance Bill, 2022

Amendment of section 37. 12. In section 37 of the Income-tax Act, in sub-section (1), after Explanation 2, the following Explanation shall be inserted, namely: Explanation 3. For the removal of doubts, it is hereby clarified that the expression expenditure incurred by an assessee for any purpose which is an offence or which is prohibited by law under Explanation 1, shall include and shall be deemed to have always included the expenditure incurred by an assessee, (i) for any purpose which is an offence under, or which is prohibited by, any law for the time being in force, in India or outside India; or (ii) to provide any benefit or perquisite, in whatever form, to a person, whether or not carrying on a business or exercising a profession, and acceptance of such benefit or perquisite by such person is in violation of any law or rule or regulation or guideline, as the case may be, for the time being in force, governing the conduct of such person; or (iii) to compound an offence under any law for the time being in force, in India or outside India. .