Other Deductions under Section 36

# Other Deductions [Section 36]

Section 36 specifies various specific deductions allowable in computing PGBP income.

## (1) Stock Insurance [Sec. 36(1)(i)]

Insurance premium paid on stock-in-trade is allowed as deduction.

## (2) Health/Medical Insurance of Employees [Sec. 36(1)(ib)]

Premium for health/medical insurance of employees is allowed as deduction, provided it is paid by any mode OTHER than cash.

## (3) Bonus or Commission to Employees [Sec. 36(1)(ii)]

Bonus or commission paid to employees is allowed as deduction, subject to Section 43B (i.e., must be actually paid before due date of filing return under Section 139(1)).

Anti-abuse: such bonus/commission should NOT be in lieu of dividend that would have otherwise been paid.

## (4) Interest on Loan for Business Purpose [Sec. 36(1)(iii)]

```

For Depreciable Assets For Other Cases

| |

┌──────┴──────┐ |

| | |

Interest Interest Allowed u/s 36

UPTO AFTER [Subject to Section 43B]

put-to-use put-to-use

| |

Added to Allowed u/s 36

Cost of [Subject to Section 43B]

Asset

```

## (5) Discount on Zero Coupon Bond [Sec. 36(1)(iiia)]

Discount = (Maturity value − Issue price). It is amortised over the life of the zero coupon bond on a pro-rata basis and allowed as deduction.

## (6) Employer's Contribution for Benefit of Employees [Sec. 36(1)(iv) & related]

Section 43B Reminder: Even if liability is provided in books, deduction is allowed ONLY when the payment is actually made on or before the due date of furnishing the return of income under Section 139(1).