Section 37 → Section 39
General
Quick Answer
Section 37 of the Income Tax Act, 1961 (General) corresponds to Section 39 of the Direct Tax Code 2025 (Income-tax Act, 2025), effective 1st April 2026. Status: Retained.
Sec 37
Provision Summary
Residuary section allowing deduction for any expenditure (not capital/personal) laid out wholly and exclusively for the purposes of the business.
Sec 39
Provision Summary
Retained. Explicitly disallows expenses incurred for offenses, CSR (Corporate Social Responsibility) expenses, and freebies/gifts to medical practitioners.
Key Changes & Highlights
- Stringent anti-bribery and anti-freebie clauses firmly embedded into the statute.
Related Articles from the Tax Academy
chapter via deductions
Direct Tax Code 2025: End of Deductions Like Section 80V?
Expert analysis of the proposed Direct Tax Code 2025 and its impact on deductions. Learn why provisions like the old Section 80V for interest on tax loans will not return.
chapter via deductions
Interest on Tax Loans: Is It Deductible in 2026 Under the New Tax Code?
Expert analysis on the deductibility of interest on loans for income tax payment under the new Direct Tax Code 2025 vs the old Income Tax Act 1961. Clarifies the status of Section 80V.
corporate compliance
Disallowed Expenses: A Corporate Guide to the New Direct Tax Code 2025
A professional compliance guide for corporations on the transition from the Income Tax Act 1961 to the Direct Tax Code 2025, focusing on disallowed expenses.
creator economy
Creator Tax Guide: 2026 Expense Claims & GST Transition
Navigate the shift from Income Tax Act 1961 to DTC 2025. This guide details how YouTubers, freelancers, and digital creators claim expenses against brand deal GST and optimize income tax.
creator economy
India's New Direct Tax Code 2025: A Guide for YouTubers & Creators
Expert CA breakdown of the Direct Tax Code 2025. Learn how new tax slabs, business income rules, and TDS will impact YouTubers, freelancers, and creators.
general transition
ITAT Rulings Under Direct Tax Code 2025: A Complete Transition Guide
Expert legal and tax analysis on the validity of judicial precedents from the Income Tax Act 1961 under the new Direct Tax Code 2025. A crucial compliance guide for CAs and businesses.
Frequently Asked Questions
What does Section 37 of the Income Tax Act 1961 deal with?
Section 37 (General) Residuary section allowing deduction for any expenditure (not capital/personal) laid out wholly and exclusively for the purposes of the business.
What is the new section number for Section 37 under the Direct Tax Code 2025?
Section 37 of the ITA 1961 maps to Section 39 of the Direct Tax Code 2025 (Income-tax Act, 2025), effective from 1st April 2026.
What is the status of Section 37 under the new tax code?
Section 37 is marked as "Retained" with status "Active". Impact: Critical - The most widely used deduction section for businesses.
What are the key changes to Section 37 under DTC 2025?
Stringent anti-bribery and anti-freebie clauses firmly embedded into the statute.
Disclaimer: This page is for educational and reference purposes only. Section mappings are based on publicly available drafts and circulars. Always consult a qualified Chartered Accountant before filing or making compliance decisions under the Direct Tax Code 2025.
Need professional help on Section 37?
Compare trusted providers — both offer DTC 2025-ready CA services.
*Affiliate links — we may earn a small commission at no extra cost to you. Disclosure.
Want to calculate tax on this section?