As proposed by Finance Bill (2) 2024, CBDT has now notified disallowance of expense incurred in relation to contravention of SEBI, Competition, Depositories and SCRA Acts.
CA Pratibha Goyal | Apr 24, 2025 |
Income Tax Notification Alert: Expenditure incurred to settle proceedings initiated in relation to contravention or defaults under SEBI, Securities Contracts (Regulation) Act, Depositories Act, 1996, Competition Act, 2002 disallowed.
The Central Board of Direct Taxes (CBDT) in exercise of the powers conferred by clause (iv) of Explanation 3 of sub-section (1) of section 37 of the Income-tax Act, 1961 (43 of 1961), has notified that any expenditure incurred to settle proceedings initiated in relation to contravention or defaults under the following laws shall not be deemed to have been incurred for the purpose of business or profession and no deduction or allowance shall be made in respect of such expenditure:
(a) The Securities and Exchange Board of India Act, 1992 (15 of 1992);
(b) The Securities Contracts (Regulation) Act, 1956 (42 of 1956);
(c) The Depositories Act, 1996 (22 of 1996);
(d) The Competition Act, 2002 (12 of 2003).
This was proposed by the FINANCE (No. 2) BILL, 2024, and now the same has been notified.
This notification shall come into force on the date of its publication in the Official Gazette
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