How to add the Incident subcategory for sm version 9.40?
I can't find anywhere to add as for older version we just add in the area
Have you checked Incident Management > Configuration > Incident Categories?
Subcategories per category are listed there - in OOB, you seem to be able to add new subcats only to "request for administration" and "complaint".
I suppose the restriction is linked to HP's new approach to separate HP's own proprietary content from customer's customized content.
You should be able to add subcategories and areas to every category. You need to have Service Desk Configuration and Incident Management Configuration roles (the sysadmin security role does not have these out of box, the system administration security role does).
Note that most should be defined starting with Service Desk > Configuration > Interaction Categories. When adding there SM can automatically generate the incident level codes when the interaction codes are added.