Section 26: Unauthorised deductions

26. Unauthorised deductions (1) Notwithstanding sections 18 and 19 but subject to this section, no deduction shall be made in respect of— (a) any investment, expenditure or loss to the extent to which it is capital or of a capital nature; (b) any expenditure or loss to the extent to which it is incurred in the production of income which is exempt income; (c) any reserve or provision of any kind; (d) any expenditure or loss recoverable under a contract of insurance or indemnity; (e) any expenditure incurred in providing business entertainment or any gift; (f) — (g) income tax or foreign tax; or (h) any expenditure or loss to the extent to which it is of a private or domestic nature. (2) Where the Director-General is satisfied that any expenditure of a capital nature in relation to alterations or improvements to any premises, machinery or plant, does not increase the capital value of the premises, machinery or plant, or that the expenditure increases the capital value by an amount less than the amount of the expenditure, he may allow such deduction as he may determine. [Issue 9] I5 – 26 Revised Laws of Mauritius (3) Where any expenditure or loss incurred by a person in the production of his gross income and exempt income is not directly attributable to the production of such income, that part of the expenditure or loss attributable to the production of the exempt income shall be disallowed in such proportion and as may be prescribed. (Now spelt out in GN 78 of 1996). (4) — [S. 26 amended by s. 10 (d) of Act 18 of 1999 w.e.f. 31 July 1999; s. 9 (d) of Act 18 of 2003 w.e.f. the year of assessment commencing 1 July 2003; s. 18 (k) of Act 15 of 2006 w.e.f. 1 July 2007; s. 8 (a) of Act 1 of 2009 w.e.f. 1 January 2009.] Sub-Part C – Income Exemption Threshold for Individuals [Heading repealed and replaced by s.18 (l) of Act 15 of 2006 w.e.f. 1 July 2006.]