Adding business expenses accurately is essential for reducing your taxable income and ensuring correct profit reporting under the Income from Business & Profession head.

What are Direct and Indirect Expenses?

• Direct Expenses

  These are costs directly related to the production of goods or services—such as raw materials, wages for production staff, or freight. They vary with your level of output.

• Indirect Expenses

  These are overhead costs required to run your business, but not linked to the production of a specific product or service. Examples include rent, utilities, marketing, or administrative salaries.

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Add Direct Expenses

When entering your business income, you'll find a section for Direct Expenses:

• Enter the relevant details like expense category, description, and amount.
• These are typically linked to sales or cost of goods sold.

Add Indirect Expenses

Once you’ve added your business income:

1. Go to the Expenses tab.
2. Click Add Expense Details.
3. Select the appropriate:
   • Expense Head (e.g., Rent, Utilities, Salaries)
   • Expense Sub Head (e.g., Office Rent, Electricity Bill)
4. Add an optional description.
5. Enter the amount and click Save.

Why It Matters

• Claiming valid business expenses helps you lower taxable profits.
• Helps maintain accurate Profit & Loss (P&L) and Balance Sheet records.
• Ensures compliance with income tax regulations.

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