Taxpayers can claim all the expenses directly connected to their business as a business expense. The expenses incurred should be wholly and exclusively in relation to business and professional income. 


Expenses like professional fees, consultancy expenses, accounting/audit fees, utility expenses (light/internet expenses for trading), salary expenses, and rent expenses can be deducted from gross profits to arrive at taxable income.  
 


Steps to add Business Expenses

  • In the Filing tab, navigate to INCOMES > BUSINESS & PROFESSION from the side nav
  • Click on Regular Business Income
  • Enter the Business Details
    • Name
    • Description
    • Nature & Category of the business
  • Enter Income Details
  • Click on Save
  • Next, select the business
  • Navigate to Expenses
  • Click on Add  
  • Select expense head/subhead
  • Enter the expense Amount
  • Click on Save


Read more about Expenses a business can claim



Steps to add Professional Expenses

  • In the Filing tab, navigate to INCOMES > BUSINESS & PROFESSION from the side nav
  • Click on Regular Profession Income
  • Enter the Profession Details
    • Name
    • Description 
    • Nature & Category of the Profession
  • Enter the Income Details
  • Click on Save
  • Select the Profession
  • Navigate to Expenses
  • Click on Add  
  • Select expense head/subhead
  • Enter expense Amount
  • Click on Save



Speculative vs Non-speculative Business Related Expenses

Any expenses related to a speculative business activity such as Intraday trading shall be reported as expenses related to a speculative business income. 

All the other expenses can be reported as expenses related to non-speculative business income (such as F&O trading, regular business such as manufacturing or trading of goods & services)