Professional tax - Whether deductible as revenue expenditure

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..... ecific provisions of section 40(a)(ii). Section 40(a)(ii) authorises disallowance of any sum paid on account of any rate or tax levied on the profits or gains of any business or profession or assessed at a proportion of, or otherwise on the basis of, any such profits and gains. The professional tax levied by local authorities cannot normally be considered to fall within section 40(a)(ii). In o .....

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..... profits or gains accrue or arise in a particular year. The payment of such tax is a necessary condition for the carrying on of business within the area of a local authority. It would, accordingly, appear that the professional tax paid by a person carrying on a business or trade can be allowed to him as a deduction under section 37(1). Circular : No. 16 [F. No. 9/38/69-IT(A-II)], dated 18-9- .....

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