Section 34: Sums deductible from gross profits
Reviewed by Finin2min Editorial Desk · Last reviewed 30 August 2026
Lists the sums deductible from gross profit when computing available surplus.
Principal remaining provisions commenced on 21 November 2025 under S.O. 5322(E), read with the earlier partial commencement; check section-specific footnotes in the current India Code text.
Provision / India Code ↗ · Official Act PDF ↗ · 2026 Central Rules ↗
Finin2min analysis — what the section actually does
Operative clauses
- The following sums shall be deducted from the gross profits as prior charges, namely:— (a) any amount by way of depreciation admissible in accordance with the provisions of sub- section (1) of section 32 of the Income-tax Act or in accordance with the provisions of the agricultural income-tax law, for the time being in force, as the case may be;
- (b) subject to the provisions of section 35, any direct tax which the employer is liable to pay for the accounting year in respect of his income, profits and gains during that year;
- (c) such further sums in respect of the employer as may be prescribed by the Central Government.
Provisos, explanations & qualifications
- No proviso/explanation was separately extracted from this section text.
Thresholds and timelines in the text
- (b) subject to the provisions of section 35, any direct tax which the employer is liable to pay for the accounting year in respect of his income, profits and gains during that year;
Actors expressly appearing in the text
Employer, Central Government
Full statutory text — Section 34
34. Sums deductible from gross profits.—The following sums shall be deducted from the gross
profits as prior charges, namely:—
(a) any amount by way of depreciation admissible in accordance with the provisions of sub-
section (1) of section 32 of the Income-tax Act or in accordance with the provisions of the agricultural
income-tax law, for the time being in force, as the case may be;
(b) subject to the provisions of section 35, any direct tax which the employer is liable to pay for
the accounting year in respect of his income, profits and gains during that year;
(c) such further sums in respect of the employer as may be prescribed by the Central Government.How to apply this provision
- Primary statutory test — The following sums shall be deducted from the gross profits as prior charges, namely:— (a) any amount by way of depreciation admissible in accordance with the provisions of sub- section (1) of section 32 of the Income-tax Act or in accordance with the provisions of the agricultural income-tax law, for the time being in force, as the case may be;
- Additional operative limb — (b) subject to the provisions of section 35, any direct tax which the employer is liable to pay for the accounting year in respect of his income, profits and gains during that year;
- Numerical or timing control — (b) subject to the provisions of section 35, any direct tax which the employer is liable to pay for the accounting year in respect of his income, profits and gains during that year;
- Central Rule mapping — 26. Read the mapped provision together with this text rather than treating the concordance as a substitute for it.
- Evidence file — retain facts and records proving the role/status of: Employer, Central Government.
Rules, forms and cross-references
Direct 2026 Central Rule mapping
Forms mapped
No prescribed form is directly mapped in the current concordance.
Other sections cited in this text
Related Labour Hub resources
A direct concordance is not exhaustive. Central/State jurisdiction, schemes, authority appointments, saved instruments and later notifications may change the practical route without changing the section wording.
Worked example
An employer configuring payroll for sums deductible from gross profits should first identify the employee and wage period, then apply the exact provision and any linked rule. The system rule should be tested against a sample payslip and bank/payment record. A text point to test is: “(b) subject to the provisions of section 35, any direct tax which the employer is liable to pay for the accounting year in respect of his income, profits and gains during that year;” Read the mapped Central Rule(s) 26.
Illustration only; it is not statutory text or a substitute for applying the actual facts, jurisdiction, current rule/scheme and official instrument.
Q&A — Section 34
What does Section 34 of the Code on Wages cover?
Lists the sums deductible from gross profit when computing available surplus.
What is the main legal requirement or power in Section 34?
The first operative clause identified from the official text is: “The following sums shall be deducted from the gross profits as prior charges, namely:— (a) any amount by way of depreciation admissible in accordance with the provisions of sub- section (1) of section 32 of the Income-tax Act or in accordance with the provisions of the agricultural income-tax law, for the time being in force, as the case may be;” Read it with the remaining subsections and any proviso below.
Does Section 34 contain a proviso or explanation?
No standalone proviso or explanation was extracted from this section text. Check the full text below for clause-level qualifications.
What time limit, percentage or amount appears in Section 34?
The provision contains this numerical/time expression: “(b) subject to the provisions of section 35, any direct tax which the employer is liable to pay for the accounting year in respect of his income, profits and gains during that year;” Apply it only in the clause and context in which it appears.
Which 2026 Central Rules are linked to Section 34?
The current concordance maps Section 34 to Central Rule(s) 26.
Is Section 34 currently operative?
Principal remaining provisions commenced on 21 November 2025 under S.O. 5322(E), read with the earlier partial commencement; check section-specific footnotes in the current India Code text.
Source & verification trail
Act: Code on Wages, 2019 — official India Code PDF ↗
Central Rules: Code on Wages (Central) Rules, 2026 — G.S.R. 343(E), 8 May 2026 ↗
Official library: Ministry of Labour & Employment — Labour Codes ↗
Source check: 20 August 2026. Individual professional interpretation should be re-reviewed when the section, rules, notification, scheme, State overlay or controlling judgment changes.