This article establishes the foundational principle for tax deductions. An expense is deductible if incurred 'wholly and exclusively' for the Taxable Person’s business and is not capital in nature. It explicitly disallows deductions for expenditure related to deriving Exempt Income and for non-business losses. For expenditure with a dual purpose (business and non-business), the rules permit a deduction for any identifiable business portion. For unidentifiable portions, an appropriate proportion may be deducted based on a fair and reasonable allocation, reflecting the specific facts and circumstances of the business and the expenditure incurred.