Income Tax Act, 2025
Section 39: Managing agency commission.—Omitted by the Direct Tax Laws (Amendment)
39. Managing agency commission.—Omitted by the Direct Tax Laws (Amendment)
Act, 1987 (4 of 1988), s. 12, (w.e.f. 11989).
40. Amounts not deductible.—Notwithstanding anything to the contrary in 3[section 30 to 38], the
following amounts shall not be deducted in computing the income chargeable under the head “Profits and
gains of business or profession”,—
(a) in the case of any assessee—
4[(i) any interest (not being interest on a loan issued for public subscription before the 1st day
of April, 1938), royalty, fees for technical services or other sum chargeable under this Act, which
is payable,—
(A) outside India; or
(B) in India to a non-resident, not being a company or to a foreign company,
on which tax is deductible at source under Chapter XVII-B and such tax has not been deducted
or, after deduction, has not been paid 5[on or before the due date specified in sub-section (1) of
section 139]:
6[Provided that where in respect of any such sum, tax has been deducted in any subsequent
year, or has been deducted during the previous year but paid after the due date specified in
sub-section (1) of section 139, such sum shall be allowed as a deduction in computing the income
of the previous year in which such tax has been paid.]
Explanation.—For the purposes of this sub-clause,—
(A) “royalty” shall have the same meaning as in Explanation 2 to clause (vi) of
sub-section (1) of section 9;
(B) “fees for technical services” shall have the same meaning as in Explanation 2 to
clause (vii) of sub-section (1) of section 9;
(ia) 7[thirty per cent of any sum payable to a resident], on which tax is deductible at source
under Chapter XVII-B and such tax has not been deducted or, after deduction, 8[has not been paid
on or before the due date specified in sub-section (1) of section 139:]
9[Provided that where in respect of any such sum, tax has been deducted in any subsequent
year, or has been deducted during the previous year but paid after the due date specified in
sub-section (1) of section 139, 10[thirty per cent of] such sum shall be allowed as a deduction in
computing the income of the previous year in which such tax has been paid:]
1. Subs. by Act 46 of 1986, s. 32, for “clause (i), (ii), (iia) and (iii) of sub-section (1) and sub-section (1A)” (w.e.f. 1
1988).
Act, 1987 (4 of 1988), s. 12, (w.e.f. 11989).
40. Amounts not deductible.—Notwithstanding anything to the contrary in 3[section 30 to 38], the
following amounts shall not be deducted in computing the income chargeable under the head “Profits and
gains of business or profession”,—
in the case of any assessee—
4[
any interest (not being interest on a loan issued for public subscription before the 1st day
of April, 1938), royalty, fees for technical services or other sum chargeable under this Act, which
is payable,—
outside India; or
in India to a non-resident, not being a company or to a foreign company,
on which tax is deductible at source under Chapter XVII-B and such tax has not been deducted
or, after deduction, has not been paid 5[on or before the due date specified in sub-section
of
section 139]:
6[Provided that where in respect of any such sum, tax has been deducted in any subsequent
year, or has been deducted during the previous year but paid after the due date specified in
sub-section
of section 139, such sum shall be allowed as a deduction in computing the income
of the previous year in which such tax has been paid.]
Explanation.—For the purposes of this sub-clause,—
“royalty” shall have the same meaning as in Explanation 2 to clause
of
sub-section
of section 9;
“fees for technical services” shall have the same meaning as in Explanation 2 to
clause
of sub-section
of section 9;
7[thirty per cent of any sum payable to a resident], on which tax is deductible at source
under Chapter XVII-B and such tax has not been deducted or, after deduction, 8[has not been paid
on or before the due date specified in sub-section
of section 139:]
9[Provided that where in respect of any such sum, tax has been deducted in any subsequent
year, or has been deducted during the previous year but paid after the due date specified in
sub-section
of section 139, 10[thirty per cent of] such sum shall be allowed as a deduction in
computing the income of the previous year in which such tax has been paid:]
1. Subs. by Act 46 of 1986, s. 32, for “clause
and
of sub-section
and sub-section