The principle is simple — expenses incurred wholly and exclusively for business are deductible. The application is where businesses win or lose assessments.

Comfortably deductible

  • Rent, salaries, professional fees, advertising, travel for business
  • Interest on business borrowings
  • Repairs, insurance, software subscriptions
  • Depreciation on business assets

The contested middle

  • Mixed-use expenses: vehicle, phone, home-office — claim the business proportion and document how you arrived at it
  • Owner’s personal spends routed through the business: the classic assessment target
  • Client entertainment and gifts: deductible within reason, scrutinised beyond it

Statutorily blocked regardless of business purpose

  • Payments where TDS obligations were ignored (portion disallowed as per rules)
  • Cash payments above the prescribed daily limit per person
  • Personal taxes, penalties and fines for law violations

The audit-proof habit

Invoice + payment proof + business purpose note. Expenses with all three survive; expenses with none fund the demand.

We build clean expense records through bookkeeping — get in touch.