Section 5

The principal Act is amended by inserting, immediately after section 38, the following new section 38A:

“Limitation on deduction of entertainment expenses 38A.

Where an employee’s gross income from an employment under subsection 13(1) includes for the basis period for a year of assessment any entertainment allowance, the amount of expenses deductible under subsection 33(1) in respect of entertainment by the employee, shall not exceed the amount of such entertainment allowance included in that gross income.”.