Section 37 of the Income Tax Act, 1961 (‘Act’) provides for deduction of revenue expenditure incurred, not being personal expenses and not being those covered by provisions of Section 30 to 36 of the Act, wholly and exclusively for the purpose of the business or profession against income chargeable under the head Profits and Gains from Business or Profession.
Finance Act (No.2) 2014 has inserted Explanation 2 to the Section 37 which provides that any expenditure incurred by the assessee on the activities[1] relating to Corporate Social Responsibility (‘CSR’) referred to in Sec 135 of the Companies Act, 2013 shall not be deemed to incurred for the purpose of business or profession.