Income Tax

Introduction Are you looking to understand about Amortisation of Certain Preliminary Expenses Section 35D of Income Tax Act 1961: A Complete Guide ?  This detailed article will tell you all about Amortisation of Certain Preliminary Expenses Section 35D of Income Tax Act 1961: A Complete Guide. Hi, my name is Shruti Goyal, I have been working in the field of Income Tax since 2011. I have a vast experience of filing income tax returns, accounting, tax advisory, tax consultancy, income tax provisions and tax planning. Amortisation of Certain Preliminary Expenses Section 35D of Income Tax Act 1961 is an essential provision that allows businesses to deduct certain expenses incurred before the commencement of their operations. Section 35D of the Income Tax Act was introduced in 1992 and applies to all taxpayers, whether individuals or companies. In this blog, we will discuss the various aspects of Amortisation of Certain Preliminary Expenses Section 35D of Income Tax Act 1961 and how it can benefit taxpayers. What is Amortisation of Certain Preliminary Expenses Section 35D of Income Tax Act 1961? Amortisation of Certain Preliminary Expenses Section 35D of Income Tax Act 1961 allows businesses to deduct certain expenses incurred before the commencement of their operations. These expenses include expenses related to the: Preparation of feasibility reports Conducting market surveys or any other surveys Engineering services related to the project Architectural services related to the project Legal fees paid for drafting the project agreement Expenses incurred for the incorporation of the company Other expenses directly related to the project These expenses are typically incurred before a business starts its operations and are necessary for setting up the business. The Income Tax Act recognizes the importance of these expenses and allows taxpayers to deduct them from their taxable income over a period of time. How is Amortisation of Certain Preliminary Expenses Section 35D of Income Tax Act 1961 Calculated? Amortisation of Certain Preliminary Expenses Section 35D of Income Tax Act 1961 can be calculated as follows: The total amount of preliminary expenses incurred by the taxpayer is divided into five equal installments. The taxpayer can claim a deduction of one-fifth of the total preliminary expenses each year for the next five years. For example, if a taxpayer incurs Rs. 1,00,000 as preliminary expenses, they can claim a deduction of Rs. 20,000 each year for the next five years. Who can Claim Amortisation of Certain Preliminary Expenses Section 35D of Income Tax Act 1961? Amortisation of Certain Preliminary Expenses Section 35D of Income Tax Act 1961 can be claimed by any taxpayer who has incurred preliminary expenses before the commencement of their operations. This includes both individuals and companies. Are there any Restrictions on Claiming Amortisation of Certain Preliminary Expenses Section 35D of Income Tax Act 1961? Yes, there are certain restrictions on claiming Amortisation of Certain Preliminary Expenses Section 35D of Income Tax Act 1961. These include: The expenses must be incurred before the commencement of operations The expenses must be related to the business project The expenses must be capital in nature The expenses cannot be claimed as a deduction under any other provision of the Income Tax Act How is Amortisation of Certain Preliminary Expenses Section 35D of Income Tax Act 1961 Different from Other Deductions? Amortisation of Certain Preliminary Expenses Section 35D of Income Tax Act 1961 is different from other deductions in the following ways: The deduction is allowed over a period of five years The deduction is allowed only for certain expenses that are incurred before the commencement of operations The deduction is allowed only for expenses that are capital in nature and related to the business project What are the Benefits of Claiming Amortisation of Certain Preliminary Expenses Section 35D of Income Tax Act 1961? Claiming Amortisation of Certain Preliminary Expenses Section 35D of Income Tax Act 1961 can provide several benefits to taxpayers, including: Reducing taxable income: By claiming a deduction for preliminary expenses, taxpayers can reduce their taxable income, which can result in lower tax liability. Improving cash flow: Claiming a deduction for preliminary expenses can improve cash flow, as taxpayers can receive a refund for taxes paid on the deducted amount. Encouraging investment: Amortisation of Certain Preliminary Expenses Section 35D of Income Tax Act 1961 can encourage investment in new projects, as it reduces the cost of setting up a business. FAQs Can all businesses claim Amortisation of Certain Preliminary Expenses Section 35D of Income Tax Act 1961? Yes, all businesses that have incurred preliminary expenses before the commencement of their operations can claim Amortisation of Certain Preliminary Expenses Section 35D of Income Tax Act 1961. How is Amortisation of Certain Preliminary Expenses Section 35D of Income Tax Act 1961 different from depreciation? Amortisation of Certain Preliminary Expenses Section 35D of Income Tax Act 1961 allows businesses to deduct certain expenses related to the project, while depreciation allows businesses to deduct the wear and tear of assets used in the project. Can expenses incurred after the commencement of operations be claimed under Amortisation of Certain Preliminary Expenses Section 35D of Income Tax Act 1961? No, only expenses incurred before the commencement of operations can be claimed under Amortisation of Certain Preliminary Expenses Section 35D of Income Tax Act 1961. Can preliminary expenses be claimed as a deduction under any other provision of the Income Tax Act? No, preliminary expenses cannot be claimed as a deduction under any other provision of the Income Tax Act. Conclusion In conclusion, Amortisation of Certain Preliminary Expenses Section 35D of Income Tax Act 1961 is a crucial provision that allows businesses to deduct certain expenses incurred before the commencement of their operations. By claiming a deduction for preliminary expenses, taxpayers can reduce their taxable income, improve cash flow, and encourage investment in new projects. However, there are certain restrictions on claiming Amortisation of Certain Preliminary Expenses Section 35D of Income Tax Act 1961, and taxpayers should ensure that they meet all the requirements before claiming a deduction. Section 35D, of

Introduction In recent years, the Indian government has been taking steps to encourage skill development and improve the employability of its citizens. One such step is the introduction of Expenditure on Skill Development Project Section 35CCD of Income Tax Act 1961. This section allows businesses to claim a tax deduction on their expenditure related to skill development projects. The government’s aim behind this section is to promote skill development activities in the country, which will ultimately lead to the creation of a skilled workforce that can contribute to the country’s economic growth. In this blog post, we’ll explain in detail what Expenditure on Skill Development Project Section 35CCD of Income Tax Act 1961 is, how it works, and how it can benefit you or your organization. What is Expenditure on Skill Development Project Section 35CCD of Income Tax Act 1961? Expenditure on Skill Development Project Section 35CCD of Income Tax Act 1961 is a section of the Income Tax Act that provides tax benefits to businesses that incur expenditure on skill development projects. Under this section, businesses can claim a deduction of 150% on their expenditure related to skill development projects. How does Expenditure on Skill Development Project Section 35CCD of Income Tax Act 1961 work? The process of claiming a deduction under Expenditure on Skill Development Project Section 35CCD of Income Tax Act 1961 is quite simple. Businesses need to follow these steps: First, they need to identify the skill development project they want to undertake. Then, they need to estimate the total expenditure they will incur on the project. Next, they need to ensure that the project meets the criteria specified under the section. Finally, they can claim a deduction of 150% on the total expenditure incurred on the project in their income tax return. It is important to note that the deduction can only be claimed by businesses that are engaged in the business of providing skill development training or have incurred expenditure on skill development projects. What are the criteria for a project to be eligible for a deduction under Expenditure on Skill Development Project Section 35CCD of Income Tax Act 1961? To be eligible for a deduction under Expenditure on Skill Development Project Section 35CCD of Income Tax Act 1961, the skill development project must meet the following criteria: The project must be approved by the National Skill Development Corporation (NSDC) or any other organization notified by the central government. The project must be in line with the National Skill Qualification Framework (NSQF). The project must lead to the issuance of a certificate or diploma to the trainee. If the skill development project meets all these criteria, businesses can claim a deduction of 150% on their expenditure related to the project. What are the benefits of Expenditure on Skill Development Project Section 35CCD of Income Tax Act 1961? There are several benefits of Expenditure on Skill Development Project Section 35CCD of Income Tax Act 1961, both for businesses and for the country as a whole. Some of these benefits are: Encourages skill development: The section encourages businesses to invest in skill development projects, which helps in the creation of a skilled workforce. This, in turn, can lead to increased productivity and economic growth. Tax benefits for businesses: Businesses can claim a deduction of 150% on their expenditure related to skill development projects. This can result in significant tax savings for businesses. Improved employability: Skill development projects can improve the employability of individuals, making them more desirable to potential employers. This can lead to reduced unemployment and improved standards of living. Increased competitiveness: A skilled workforce can help businesses become more competitive, both nationally and internationally. This can lead to increased revenue and profits for businesses. FAQs about Expenditure on Skill Development Project Section 35CCD of Income Tax Act 1961 Is the deduction available to all businesses? No, the deduction is only available to businesses that are engaged in the business of providing skill development training or have incurred expenditure on skill development projects. What is the maximum deduction that can be claimed under this section? The maximum deduction that can be claimed is 150% of the expenditure incurred on the skill development project. Is there any limit on the amount of expenditure that can be claimed as a deduction? No, there is no limit on the amount of expenditure that can be claimed as a deduction. Can the deduction be carried forward to future years? No, the deduction cannot be carried forward to future years. How can businesses claim the deduction under this section? Businesses can claim the deduction by including the expenditure related to the skill development project in their income tax return and applying the 150% deduction to the amount. Conclusion Expenditure on Skill Development Project Section 35CCD of Income Tax Act 1961 is a beneficial provision that encourages businesses to invest in skill development projects. The section provides tax benefits to businesses and helps in the creation of a skilled workforce, which can lead to increased productivity and economic growth. To be eligible for the deduction, businesses need to ensure that the skill development project meets the criteria specified under the section. Businesses that are engaged in the business of providing skill development training or have incurred expenditure on skill development projects should take advantage of this provision to reduce their tax liability and contribute to the country’s economic growth. Section 35CCD, of Income Tax Act, 1961 Section 35CCD, of Income Tax Act, 1961 states that (1) Where a company incurs any expenditure (not being expenditure in the nature of cost of any land or building) on any skill development project notified by the Board in this behalf in accordance with the guidelines as may be prescribed67, then, there shall be allowed a deduction of a sum equal to one and one-half times of such expenditure : Provided that for the assessment year beginning on or after the 1st day of April, 2021, the provisions of this sub-section shall have effect as

Introduction The Expenditure on Agricultural Extension Project Section 35CCC of Income Tax Act 1961 is a scheme introduced by the Indian government to encourage investments in agricultural extension projects. The scheme allows for tax benefits for individuals and companies that invest in such projects. Agricultural extension projects are those that aim to improve agriculture practices and promote the use of modern technologies and techniques in farming. In this blog, we will cover everything you need to know about Expenditure on Agricultural Extension Project Section 35CCC of Income Tax Act 1961. We will discuss the benefits of the scheme, the eligibility criteria, and how to claim the tax benefits. Benefits of Expenditure on Agricultural Extension Project Section 35CCC Investing in agricultural extension projects not only helps in promoting sustainable agriculture practices but also comes with tax benefits. Here are some of the benefits of Expenditure on Agricultural Extension Project Section 35CCC: Tax exemption: Individuals and companies that invest in agricultural extension projects are eligible for a deduction of up to 100% of the amount invested. This deduction can be claimed for up to 5 consecutive years from the year of commencement of the project. Promotion of sustainable agriculture practices: The scheme aims to promote the use of modern technologies and techniques in farming, leading to more sustainable agriculture practices. This, in turn, can help in improving the productivity of the agricultural sector. Encouragement of private investment: The scheme encourages private investment in the agricultural sector, leading to more opportunities for farmers and other stakeholders in the sector. Eligibility criteria for Expenditure on Agricultural Extension Project Section 35CCC To be eligible for tax benefits under the scheme, individuals and companies must meet certain criteria. Here are the eligibility criteria for Expenditure on Agricultural Extension Project Section 35CCC: Investment in agricultural extension projects: The scheme is applicable only for investments made in agricultural extension projects. These projects should aim to promote sustainable agriculture practices and the use of modern technologies in farming. Approval by the National Committee: The agricultural extension project should be approved by the National Committee. The National Committee is responsible for approving projects that meet the criteria set by the government. Maintenance of records: Individuals and companies claiming tax benefits under the scheme must maintain proper records of the investment made and the project’s progress. How to claim tax benefits under Expenditure on Agricultural Extension Project Section 35CCC To claim tax benefits under Expenditure on Agricultural Extension Project Section 35CCC, individuals and companies must follow these steps: Obtain approval from the National Committee: The agricultural extension project must be approved by the National Committee before any tax benefits can be claimed. Claim the deduction in the income tax return: The deduction can be claimed in the income tax return under the head ‘Business or Profession.’ Maintain proper records: Individuals and companies must maintain proper records of the investment made and the project’s progress to claim tax benefits. FAQs What is an agricultural extension project? Agricultural extension projects are those that aim to promote sustainable agriculture practices and the use of modern technologies and techniques in farming. Who is eligible for tax benefits under Expenditure on Agricultural Extension Project Section 35CCC? Individuals and companies that invest in agricultural extension projects approved by the National Committee are eligible for tax benefits under the scheme. How much tax deduction can be claimed under Expenditure on Agricultural Extension Project Section 35CCC? Individuals and companies can claim a tax deduction of up to 100% of the amount invested in agricultural extension projects. This deduction can be claimed for up to 5 consecutive years from the year of commencement of the project. Is there any limit on the amount of investment that can be made in agricultural extension projects? There is no limit on the amount of investment that can be made in agricultural extension projects. However, the tax deduction is limited to 100% of the amount invested. How can I apply for approval of my agricultural extension project? To apply for approval of an agricultural extension project, you can submit an application to the National Committee. The application should contain all the necessary details of the project, including its objectives, budget, and expected outcomes. What are the documents required to claim tax benefits under Expenditure on Agricultural Extension Project Section 35CCC? To claim tax benefits under the scheme, individuals and companies must maintain proper records of the investment made and the project’s progress. The documents required include: Proof of investment in the project Approval of the National Committee Progress reports of the project Conclusion Expenditure on Agricultural Extension Project Section 35CCC of Income Tax Act 1961 is a beneficial scheme for those who want to invest in agricultural extension projects. The scheme not only promotes sustainable agriculture practices but also provides tax benefits to individuals and companies. To claim tax benefits under the scheme, it is important to meet the eligibility criteria and follow the necessary procedures. Maintaining proper records of the investment made and the project’s progress is also important to claim tax benefits. Investing in agricultural extension projects can be a great way to contribute to the development of the agricultural sector while also availing of tax benefits. So, if you are planning to invest in such projects, make sure to consider the Expenditure on Agricultural Extension Project Section 35CCC of Income Tax Act 1961 scheme. Section 35CCC, of Income Tax Act, 1961 Section 35CCC, of Income Tax Act, 1961 states that (1) Where an assessee incurs any expenditure on agricultural extension project notified by the Board in this behalf in accordance with the guidelines as may be prescribed66, then, there shall be allowed a deduction of a sum equal to one and one-half times of such expenditure : Provided that for the assessment year beginning on or after the 1st day of April, 2021, the provisions of this sub-section shall have effect as if for the words “a sum equal to one and one-half times of”, the words “a sum equal to”

Introduction In India, the government has taken several steps to promote rural development and uplift the lives of people living in rural areas. One such step is the provision of Section 35CCA of the Income Tax Act, 1961, which allows taxpayers to claim deductions on their income tax for expenditure made by way of payment to associations and institutions for carrying out rural development programmes. This provision incentivizes taxpayers to contribute towards the development of rural areas while reducing their tax liability. Expenditure by way of payment to associations and institutions for carrying out rural development programmes under section 35CCA of Income Tax Act 1961 has several benefits. In this blog, we will discuss the provisions of Section 35CCA and the benefits it offers to both taxpayers and rural communities. We will also answer some frequently asked questions about this provision. Understanding Section 35CCA Section 35CCA of the Income Tax Act, 1961, was introduced in 2008 to encourage taxpayers to contribute towards the development of rural areas. According to this section, taxpayers can claim a deduction of 100% of the amount paid by way of expenditure to an association or institution for carrying out rural development programmes. The deduction is allowed in the year in which the payment is made. To claim this deduction, the following conditions must be met: The payment must be made to an association or institution that is engaged in carrying out rural development programmes. The association or institution must be approved by the National Committee for Promotion of Social and Economic Welfare or the National Committee for Minorities Education, as the case may be. The taxpayer must obtain a certificate from the association or institution, confirming that the amount has been spent for carrying out rural development programmes. It is important to note that this deduction is allowed only to taxpayers who are engaged in business or profession. Individuals who are not engaged in any business or profession are not eligible to claim this deduction. Benefits of Section 35CCA The provision of Section 35CCA offers several benefits to both taxpayers and rural communities. Let’s take a look at some of them: Benefits to Taxpayers Tax savings: Taxpayers can claim a deduction of 100% of the amount paid by way of expenditure to an association or institution for carrying out rural development programmes. This can result in significant tax savings for taxpayers. CSR compliance: Section 35CCA can also help companies meet their Corporate Social Responsibility (CSR) obligations. By contributing towards rural development programmes, companies can fulfil their CSR obligations and improve their public image. Benefits to Rural Communities Infrastructure development: The funds received by associations and institutions can be used for the development of infrastructure such as roads, bridges, and schools in rural areas. This can improve the quality of life for people living in rural areas. Skill development: Rural development programmes can also focus on skill development, which can help create employment opportunities for the rural population. This, in turn, can help reduce poverty and improve the overall economic condition of rural areas. Agricultural development: Rural development programmes can also focus on agricultural development, which can help improve agricultural productivity and increase the income of farmers. Frequently Asked Questions Q. Who is eligible to claim a deduction under Section 35CCA of the Income Tax Act, 1961? A. Taxpayers who are engaged in business or profession are eligible Q. Is there a limit on the amount that can be claimed as a deduction under Section 35CCA? A. No, there is no limit on the amount that can be claimed as a deduction under Section 35CCA. Q. Can the deduction be claimed for payments made to any association or institution engaged in rural development programmes? A. No, the association or institution must be approved by the National Committee for Promotion of Social and Economic Welfare or the National Committee for Minorities Education, as the case may be. Q. Is it mandatory to obtain a certificate from the association or institution confirming the expenditure made on rural development programmes? A. Yes, it is mandatory to obtain a certificate from the association or institution confirming the expenditure made on rural development programmes. Q. Can individuals who are not engaged in any business or profession claim a deduction under Section 35CCA? A. No, individuals who are not engaged in any business or profession are not eligible to claim a deduction under Section 35CCA. Conclusion The provision of Section 35CCA of the Income Tax Act, 1961, provides an excellent opportunity for taxpayers to contribute towards the development of rural areas while reducing their tax liability. It also offers several benefits to rural communities, such as infrastructure development, skill development, and agricultural development. By incentivizing taxpayers to contribute towards rural development programmes, the government is taking steps towards creating a more equitable and prosperous society. If you are engaged in business or profession and are looking for ways to reduce your tax liability while contributing towards social development, Section 35CCA can be an excellent option. However, it is important to ensure that the payments are made to approved associations or institutions and that the necessary certificates are obtained. By doing so, you can not only benefit from tax savings but also contribute towards the development of rural areas and uplift the lives of people living there. Section 35CCA, of Income Tax Act, 1961 Section 35CCA, of Income Tax Act, 1961 states that (1) Where an assessee incurs any expenditure by way of payment of any sum— (a)  to an association or institution, which has as its object the undertaking of any programme of rural development, to be used for carrying out any programme of rural development approved by the prescribed authority; or (b)  to an association or institution, which has as its object the training of persons for implementing programmes of rural development; or (c)  to a rural development fund set up and notified62-63 by the Central Government in this behalf; or (d)  to the National Urban Poverty Eradication Fund set up

Introduction In today’s world, where global warming and climate change are becoming increasingly alarming, there is an urgent need for conservation of natural resources. Many countries have recognized this and have implemented laws and regulations to promote conservation. In India, the Income Tax Act 1961 has a provision, Section 35CCB, which encourages expenditure by way of payment to associations and institutions for carrying out programmes of conservation of natural resources. This section provides tax benefits for companies or individuals who make such payments. In this blog, we will discuss Section 35CCB in detail, its provisions, benefits, and other relevant aspects. What is Section 35CCB of the Income Tax Act 1961? Section 35CCB of the Income Tax Act 1961 provides tax benefits to companies or individuals who make payments to associations and institutions for carrying out programmes of conservation of natural resources. This section was introduced by the Finance Act, 2016, and became effective from the assessment year 2017-18. The main objective of this section is to promote conservation of natural resources by incentivizing payments made to associations and institutions that work towards this cause. Provisions of Section 35CCB Section 35CCB has the following provisions: Eligibility To claim tax benefits under Section 35CCB, the following eligibility criteria must be met: The payment must be made to an association or institution that is approved by the National Biodiversity Authority or the Central Government. The association or institution must use the payment for carrying out programmes of conservation of natural resources. The payment must be made on or after 1st April 2016. Nature of Expenditure The expenditure made by way of payment to associations and institutions must be towards the following programmes of conservation of natural resources: Afforestation or tree plantation Conservation of natural forests and wildlife Protection of flora and fauna, including conservation of critically endangered species Agro-forestry and sustainable agriculture practices Protection of water resources, including watershed management Conservation of wetlands and mangroves Conservation of marine and coastal ecosystems Conservation of natural heritage sites, such as national parks and sanctuaries Amount of Deduction The deduction allowed under Section 35CCB is equal to the expenditure made by way of payment to associations and institutions for carrying out programmes of conservation of natural resources. The maximum deduction allowed is 100% of the amount paid. However, the payment must be made by a mode other than cash to claim the deduction. Benefits of Section 35CCB Section 35CCB provides the following benefits: Tax benefits: Companies or individuals who make payments towards conservation of natural resources can claim a deduction under Section 35CCB. This reduces their taxable income and hence, their tax liability. Promotion of conservation: Section 35CCB promotes conservation of natural resources by incentivizing payments towards this cause. This encourages companies and individuals to contribute towards conservation efforts. Social responsibility: Making payments towards conservation of natural resources is a sign of social responsibility. It demonstrates a company’s commitment to sustainability and environmental protection. Frequently Asked Questions (FAQs) Who is eligible to claim a deduction under Section 35CCB? Ans. Companies or individuals who make payments to associations and institutions for carrying out programmes of conservation of natural resources are eligible  

Are you looking to understand about Rural development allowance ?  This detailed article will tell you all about Rural development allowance. Hi, my name is Shruti Goyal, I have been working in the field of Income Tax since 2011. I have a vast experience of filing income tax returns, accounting, tax advisory, tax consultancy, income tax provisions and tax planning. Rural development is of utmost importance for the Indian government, and it has introduced various policies and schemes to uplift the socio-economic status of rural areas. One such measure is the Rural Development Allowance that comes under Section 35CC of the Income Tax Act. The primary objective of this allowance is to motivate businesses to take up rural development projects by providing them with a deduction of  of the amount spent on eligible projects from their taxable income. The projects that are eligible for the Rural Development Allowance include the establishment of essential infrastructure like schools, hospitals, roads, and bridges, as well as the promotion of rural industries such as handicrafts and handlooms. Other eligible projects comprise of providing fundamental amenities like clean drinking water, sanitation facilities, and electricity to the rural areas. However, these projects must be completed within three years of the financial year in which the expenditure was incurred, and they must not be undertaken in areas within the limits of a municipal corporation or cantonment board. To avail of the Rural Development Allowance, businesses must procure a certificate from the authorized entity certifying that the project meets the eligibility criteria. The certificate must be obtained before filing the tax return for the relevant year. It is essential to note that only businesses are eligible for the Rural Development Allowance, and not individuals. The Rural Development Allowance is a significant initiative towards promoting rural development and encouraging businesses to invest in rural India. It benefits businesses by reducing their tax liability, and it also contributes to the overall development of rural areas and improves the standard of living of the rural population. In conclusion, the Rural Development Allowance under Section 35CC of the Income Tax Act is a noteworthy step towards achieving sustainable rural development. It provides businesses with the opportunity to invest in the development of rural India and contribute to the growth of the country as a whole. section 35CC of Income Tax Act, 1961 Section 35CC, of Income Tax Act, 1961 states that  [Omitted by the Direct Tax Laws (Amendment) Act, 1987, as amended by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989. Original section 35CC was inserted by the Finance (No. 2) Act, 1977, w.e.f. 1-9-1977.]

Are you looking to understand about Agricultural development allowance ?  This detailed article will tell you all about Agricultural development allowance. Hi, my name is Shruti Goyal, I have been working in the field of Income Tax since 2011. I have a vast experience of filing income tax returns, accounting, tax advisory, tax consultancy, income tax provisions and tax planning. The Indian government has always demonstrated its unwavering commitment towards promoting and fostering the development of the agricultural sector, which is widely regarded as the backbone of the economy. To further support this initiative, the Income Tax Act, 1961, provides tax incentives to farmers, individuals, and companies engaged in agricultural development activities, including the Agricultural Development Allowance (ADA) under Section 35C of the Act. The ADA is a tax deduction granted to individuals involved in agricultural businesses such as horticulture, animal husbandry, and pisciculture. It allows a certain percentage of profits derived from eligible agricultural activities to be deducted, ultimately resulting in a reduction in tax liability. To qualify for the ADA, one must fulfill specific prerequisites, including active engagement in the agricultural business, incurring expenses towards developing agricultural infrastructure and facilities, generating profits from the agricultural activity during the previous year, and maintaining comprehensive books of account to claim the allowance. The ADA’s percentage is subject to review and approval by the central government and can fluctuate annually. Presently, it stands at 20% of profits derived from eligible agricultural activities. For instance, if an individual involved in horticulture spent Rs. 10 lakhs in the previous year to construct a greenhouse and purchase irrigation equipment, and earned Rs. 50 lakhs in profits from horticulture business, the ADA can be calculated by applying 20% of Rs. 50 lakhs, amounting to Rs. 10 lakhs. Consequently, the individual can claim a deduction of Rs. 10 lakhs from the taxable income, resulting in a reduction in tax liability. The Agricultural Development Allowance is a crucial tax incentive that encourages investments in agricultural infrastructure and facilities. It helps to spur growth and development in the agricultural sector. As such, eligible taxpayers should take advantage of this provision to reduce their tax liability. However, it is imperative to maintain accurate records and comply with the Income Tax Act’s rules and regulations to claim the allowance. section 35C of Income Tax Act, 1961 Section 35C, of Income Tax Act, 1961 states that [Omitted by the Direct Tax Laws (Amendment) Act, 1987, as amended by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989. Original section 35C was inserted by the Finance Act, 1968, w.e.f. 1-4-1968.]

Are you looking to understand about Export markets development allowance ?  This detailed article will tell you all about Export markets development allowance. Hi, my name is Shruti Goyal, I have been working in the field of Income Tax since 2011. I have a vast experience of filing income tax returns, accounting, tax advisory, tax consultancy, income tax provisions and tax planning. Export Markets Development Allowance (EMDA) is a tax incentive program initiated by the Indian government under Section 35B of the Income Tax Act, 1961. This program aims to promote the expansion of export markets by reimbursing a portion of expenses incurred in promoting exports. In this article, we will discuss the key aspects of EMDA and how it can benefit Indian exporters. EMDA provides Indian companies engaged in the export of goods or services with a deduction of a specific percentage of their eligible expenses incurred on promoting exports. Such expenses may include advertising costs, market research, publicity campaigns, trade fairs, and exhibitions. To qualify for EMDA, a company must satisfy specific eligibility criteria. Firstly, the company must be involved in the business of exporting goods or services. Secondly, the company must have earned foreign exchange during the previous year. Thirdly, the company must have incurred eligible expenses during the previous year. Lastly, the company must hold a certificate of eligibility issued by the Director-General of Foreign Trade. EMDA offers various advantages to Indian exporters, including the promotion of the expansion of export markets, reduction of tax liability, enhancement of competitiveness of Indian companies in the global market by providing a financial incentive to promote exports, and covering a wide range of expenses incurred in promoting exports. To claim EMDA, a company must follow specific procedures. Firstly, the company must obtain a certificate of eligibility from the Director-General of Foreign Trade. Secondly, the eligible expenses incurred in promoting exports must be computed. Finally, the company must claim a deduction of the eligible amount while filing its income tax return. In conclusion, EMDA is a useful program for Indian exporters, which encourages them to expand their export markets. The program provides several benefits, including reducing tax liability, increasing competitiveness, and covering a wide range of expenses. To be eligible for EMDA, a company must meet certain eligibility criteria and comply with the required procedures.   section 35B of Income Tax Act, 1961 Section 35B, of Income Tax Act, 1961 states that [Omitted by the Direct Tax Laws (Amendment) Act, 1987, as amended by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989. Original section 35B was inserted by the Finance Act, 1968, w.e.f. 1-4-1968.]

Are you looking to understand about Deduction in respect of expenditure on specified business ?  This detailed article will tell you all about Deduction in respect of expenditure on specified business. Hi, my name is Shruti Goyal, I have been working in the field of Income Tax since 2011. I have a vast experience of filing income tax returns, accounting, tax advisory, tax consultancy, income tax provisions and tax planning. The Income Tax Act, 1961, introduced Section 35AD as a provision that grants tax deductions and exemptions to businesses in India. This provision allows for a deduction to be claimed in respect of expenditure incurred on specified businesses, and it was created in 2010 to encourage investment in several sectors, including infrastructure, hotels, hospitals, and power generation plants, among others. Any individual, company, firm, association of persons, or body of individuals that incurs expenditure on specified businesses can claim the deduction, which depends on the type of specified business. Specified businesses covered under Section 35AD encompass a variety of sectors, such as the development and construction of housing projects or notified SEZ, operating hospitals with at least 100 beds, and generating power, among others. For instance, if an individual or entity establishes and operates a cold chain facility, the deduction will be  of the capital expenditure incurred on the project. Similarly, if an individual or entity sets up and operates a hospital with at least 100 beds, the deduction will be  of the capital expenditure incurred on the project. To claim the deduction, the individual or entity must obtain a certificate from an eligible authority certifying that the specified business has been established and is operational. The eligible authority differs based on the type of specified business. Once the certificate has been obtained, the individual or entity can claim the deduction in the income tax return for the relevant assessment year, under the head “Business or Profession.” In summary, Section 35AD offers significant tax benefits to businesses investing in specified sectors. Nonetheless, it is critical to grasp the provisions and eligibility criteria to ensure that the deduction is claimed accurately. Seeking advice from a tax professional is always advisable for any tax-related issues.   section 35AD of Income Tax Act, 1961 Section 35AD, of Income Tax Act, 1961 states that (1) An assessee shall 55[, if he opts,] be allowed a deduction in respect of the whole of any expenditure of capital nature incurred, wholly and exclusively, for the purposes of any specified business carried on by him during the previous year in which such expenditure is incurred by him : Provided that the expenditure incurred, wholly and exclusively, for the purposes of any specified business, shall be allowed as deduction during the previous year in which he commences operations of his specified business, if— (a)  the expenditure is incurred prior to the commencement of its operations; and (b)  the amount is capitalised in the books of account of the assessee on the date of commencement of its operations. (1A) [***] (2) This section applies to the specified business which fulfils all the following conditions, namely :—  (i)  it is not set up by splitting up, or the reconstruction, of a business already in existence; (ii)  it is not set up by the transfer to the specified business of machinery or plant previously used for any purpose; (iii) where the business is of the nature referred to in sub-clause (iii) of clause (c) of sub-section (8), such business,—  (a)  is owned by a company formed and registered in India under the Companies Act, 1956 (1 of 1956)56 or by a consortium of such companies or by an authority or a board or a corporation established or constituted under any Central or State Act;  (b)  has been approved by the Petroleum and Natural Gas Regulatory Board established under sub-section (1) of section 3 of the Petroleum and Natural Gas Regulatory Board Act, 2006 (19 of 2006) and notified by the Central Government in the Official Gazette in this behalf;  (c)  has made not less than such proportion of its total pipeline capacity as specified by regulations made by the Petroleum and Natural Gas Regulatory Board established under sub-section (1) of section 3 of the Petroleum and Natural Gas Regulatory Board Act, 2006 (19 of 2006) available for use on common carrier basis by any person other than the assessee or an associated person; and  (d)  fulfils any other condition as may be prescribed; (iv) where the business is of the nature referred to in sub-clause (xiv) of clause (c) of sub-section (8), such business,— (A)  is owned by a company registered in India or by a consortium of such companies or by an authority or a board or corporation or any other body established or constituted under any Central or State Act; (B)  entity referred to in sub-clause (A) has entered into an agreement with the Central Government or a State Government or a local authority or any other statutory body for developing or operating and maintaining or developing, operating and maintaining, a new infrastructure facility. (3) Where a deduction under this section is claimed and allowed in respect of the specified business for any assessment year, no deduction shall be allowed under the provisions of section 10AA and Chapter VI-A under the heading “C.—Deductions in respect of certain incomes” in relation to such specified business for the same or any other assessment year. (4) No deduction in respect of the expenditure referred to in sub-section (1) shall be allowed to the assessee under any other section in any previous year or under this section in any other previous year 57[, if the deduction has been claimed or opted by the assessee and allowed to him under this section]. (5) The provisions of this section shall apply to the specified business referred to in sub-section (2) if it commences its operations,— (a)  on or after the 1st day of April, 2007, where the specified business is in the nature of laying and operating a cross-country natural gas