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Deductions:

Section Nature of expenditure Deduction Eligible
30 Rent, rates, taxes excluding capital expenditure and insurance covered Actual expenditure incurred, not include capital expenditure All assessee
31 Repairs excluding capital expenditure and insurance covered Actual expenditure incurred, not include capital expenditure All assessee
32(1)(i) Depreciation on Buildings, machinery, plant or furniture, being tangible assets, & intangible assets i.e. know-how, patents, copyrights, trademarks, licenses, franchises. Allowed at prescribed percentage on Straight Line Method for each asset Provided that where an asset is acquired by the assesse during the previous year and use for a period of less than 180 days in that previous year, the deduction in respect of such asset shall be restricted to 50% of the amount calculated at the percentage mention. engaged in business of generation or generation and distribution of power down value method on each block of asset.
32(1)(ii) Depreciation on buildings, machinery, plant or know-how, patents, copyrights, trademarks, licenses, franchises, or any other business or commercial rights of similar nature, being intangible assets Allowed at prescribed percentage on WDV method for each block of asset Provided that where an asset is acquired by the assessee during the previous year and is put to use for a period of less than 180 days in that previous year, the deduction in respect of such asset shall be restricted to 50% of the amount calculated at the percentage prescribed for an asset. All assessee
32(1)(ii)a Additional depreciation on new plant and machinery (other than ships, aircraft, office appliances, second hand plant or machinery, etc.). (subject to certain conditions) Additional depreciation shall be available @20 % of the actual cost of new plant and machinery. Provided that where an asset is acquired by the assessee during the previous year and is put to use for a period of less than 180 days in that previous year, then deduction of additional depreciation would be restricted to 50% in the year of acquisition and balance 50% would be allowed in the next year All assessee engaged in –manufacture or production of any article or thing; or generation, transmission or distribution of power (if taxpayer is not claiming depreciation on basis of straight line method)
Proviso to Section 32(1)iia Additional depreciation on new plant and machinery (other than ships, aircraft,office appliances, second hand plant or machinery, etc.)) (Subject to certain conditions) Additional depreciation shall be available @35 % of the actual cost of new plant and machinery. Provided that where an asset is acquired by the assessee during the previous year and is put to use for a period of less than one hundred and eighty days in that previous year, then deduction of additional depreciation would be restricted to 50% of actual cost in the year of acquisition and balance 50% would be allowed in the next year All assessees- where an assessee sets up an undertaking or enterprise for production or manufacture of any article or thing in any notified backward area in state of the state of Andhra Pradesh, Bihar, Telangana or West Bengal.
32AC Deduction under section 32AC is available if actual cost of new plant and machinery acquired and installed by a manufacturing company during the previous year exceeds Rs. 25/100 Crores, as the case may be.(Subject to certain conditions) 15% of actual cost of new asset Company engaged in business or manufacturing or production of any article or thing
32AD Investment allowance for investment in new plant and machinery if manufacturing unit is set-up in the notified backward area in the state of Andhra Pradesh, Bihar, Telangana or West Bengal(Subject to certain conditions) Investment allowance shall be available @15 % of the actual cost of new plant and machinery in the year of installation of new asset.Note:- 1) New asset should be acquired and installed during the period beginning on the 1st day of April, 2015 and ending before the 1st day of April, 2020. 2) Manufacturing unit should be set-up on or after 1st day of April, 2015. All assessee who acquired new plant and machinery for the purpose of setting-up manufacturing unit in the notified backward area in the state of Andhra Pradesh, Bihar, Telangana or West Bengal
33AB Amount deposited in Tea/Coffee/Rubber Development Account by assessee engaged in business of growing and manufacturing tea/Coffee/Rubber in India Deduction shall be lower of following: a) Amount deposited in account with National Bank for Agricultural and Rural Development (NABARD) or in Deposit Account of Tea Board, Coffee Board or Rubber Board in accordance with approved scheme; or b) 40% of profits from such business before making any deduction under section 33ABand before adjusting any brought forward loss. (Subject to certain conditions) All assessee engaged in business of growing and manufacturing tea/Coffee/Rubber
33ABA Amount deposited in Special Account with SBI/Site Restoration Account by assessee carrying on business of prospecting for, or extraction or production of, petroleum or natural gas or both in India Deduction shall be lower of following: a) Amount deposited in Special Account with SBI/Site Restoration Account; or b) 20% of profits from such business before making any deduction under section 33ABA and before adjusting any brought forward loss. (Subject to certain conditions) All assessee engaged in business of prospecting for, or extraction or production of, petroleum or natural gas or both in India
35(1)(i) Revenue expenditure on scientific research pertaining to business of assessee is allowed as deduction (Subject to certain conditions). Entire amount incurred on scientific research is allowed as deduction. Expenditure on scientific research within 3 years before commencement of business (in the nature of purchase of materials and salary of employees other than perquisite) is allowed as deduction in the year of commencement of business to the extent certified by prescribed authority. All assessee
35(1)(ii) Contribution to approved research association, university, college or other institution to be used for scientific research shall be allowed as deduction. 175% of sum paid to such association, university, college, or other institution is allowed as deduction. 150% of sum paid to such association, university, college or other institution is allowed as deduction (applicable from AY 2018-19) All assessee
35(1)(ii)a Contribution to an approved company registered in India to be used for the purpose of scientific research is allowed as deduction . 125% of sum paid to the company is allowed as deduction Entire sum paid to the company is allowed as deduction (applicable from AY 2018-19) All assessee
35(1)(iii) Contribution to approved research association, university, college or other institution with objects of undertaking statistical research or research in social sciences shall be allowed as deduction 125% of sum paid to such association, university, college, or other institution is allowed as deduction Entire sum paid to such association, university, college or other institution is allowed as deduction (applicable from AY 2018-19) All assessee
35(1)iv with 35(2) Capital expenditure incurred during the year on scientific research relating to the business carried on by the assessee is allowed as deduction (Subject to certain conditions) Entire capital expenditure incurred on scientific research is allowed as deduction. Capital expenditure incurred within 3 years before commencement of business is allowed as deduction in the year of commencement of business. Note:Capital expenditure excludes land and any interest in land,No depreciation shall be allowed on such assets. All assessee
35(2AA) Payment to a National Laboratory or University or an Indian Institute of Technology or a specified person is allowed as deduction. The payment should be made with the specified direction that the sum shall be used in a scientific research . 200% of payment is allowed as deduction (Subject to certain conditions). 150% of payment is allowed as deduction (applicable from AY 2018-19) Note:-From the A.Y. beginning on or after the 1st day of April, 2021, the deduction shall be equal to the sum so paid. All assessee
35(2AB) Any expenditure incurred by a company on scientific research (including capital expenditure other than on land and building) on in-house scientific research and development facilities as approved by the prescribed authorities shall be allowed as deduction (Subject to certain conditions). Expenditure on scientific research in relation to Drug and Pharmaceuticals shall include expenses incurred on clinical trials, obtaining approvals from authorities and for filing an application for patent. 200% of expenditure so incurred shall be allowed as deduction. 150% of expenditure so incurred shall be allowed as deduction (applicable from AY 2018-19) Note: i. Company should enter into an agreement with the prescribed authority for co-operation in such research and development and fulfills conditions with regard to maintenance of accounts and audit thereof and furnishing of reports in such manner as may be prescribed. ii. From the A.Y. beginning on or after the 1st day of April, 2021, the deduction shall be equal to the expend the so incurred. Company engaged in business of bio-technology or in any business of manufacturing or production of eligible articles or things
35ABA Capital expenditure incurred and actually paid for acquiring any right to use spectrum for telecommunication services shall be allowed as deduction over the useful life of the spectrum. Deduction will be available in equal installments starting from the year in which actual payment is made and ending in the year in which spectrum comes to an end. All Assessee engaged in telecommunication services
35ABB Capital expenditure incurred for acquiring any license or right to operate telecommunication services shall be allowed as deduction over the term of the license. Deduction would be allowed in equal installments starting from the year in which such payment has been made and ending in the year in which license comes to an end. All Assessee engaged in telecommunication services
35AC Expenditure by way of payment of any sum to a public sector company/local authority/approved association or institution for carrying out any eligible scheme or project (Subject to certain conditions). Actual payment made to prescribed entities. However, a company can also claim deduction for expenditure incurred by it directly on eligible projects.No deduction in any A.Y. commencing on or after the 1st day of April, 2018 All assessee. However, deduction for direct expenditure is allowed only to a company
35AD Deduction in respect of `expenditure on specified businesses, as under: Setting up and operating a cold chain facility, operating a warehousing facility for storage of agricultural produce, Building and operating, anywhere in India, a hospital with at least 100 beds for patients d) Developing and building a housing project under a notified scheme for affordable housing e) Production of fertilizer in India. 150% of capital expenditure incurred for the purpose of business is allowed as deduction provided the specified business has commenced its operation on or after 01-04-2012. 100% of capital expenditure will be allowed to be deducted from the assessment year 2018-19 onwards Note:If such specified businesses commence operations on or before 31-03-2012 but after prescribed dates, deduction shall be limited to 100% of capital expenditure. Note: No deduction of any capital expenditure above Rs 10,000 shall be allowed if it is incurred in cash. All assessee
35AD Deduction in respect of expenditure on specified businesses, as under:
a) Laying and operating a cross-country natural gas or crude or petroleum oil pipeline network .
b) Building and operating, two-star
c) Developing and building a housing project or rehabilitation
d) Setting up and operating an inland container depot or a container freight station
e) Bee-keeping and production of honey and beeswax
f) Setting up and operating a warehousing facility for storage of sugar
g) Laying and operating a slurry pipeline for the transportation of iron ore
h) Setting up and operating a semi-conductor wafer fabrication manufacturing unit
i) developing, infrastructure facility.
100% of capital expenditure incurred for the purpose of business is allowed as deduction provided specified businesses commence operations on or after the prescribed dates. Note: No deduction of any capital expenditure above Rs 10,000 shall be allowed if it is incurred in cash. All assessee Note: Such deduction is available to Indian company in case of following business, namely;- i) Business of laying and operating a cross-country natural gas or crude or petroleum oil pipeline network ii) Developing or maintaining and operating or developing, maintaining and operating a new infrastructure facility.
35CCA National Fund for Rural Development & Notified National Urban Poverty Eradication Fund Actual payment to specified funds All assessee
35CCC Expenditure (not being cost of land/building) incurred on notified agricultural extension project for the purpose of training, educating and guiding the farmers shall be allowed as deduction, provided the expenditure to be incurred is expected to be more than Rs. 25 lakhs (Subject to certain conditions). 150% of the expenditure (Subject to certain conditions) Note:-100% deduction shall be allowed from the 1st day of April, 2021 All assessee
35CCD Expenditure incurred by a company (not being expenditure in the nature of cost of any land or building) on any notified skill development project is allowed as deduction.. 150% of the expenditure (Subject to certain conditions) Note: (i) No deduction shall be allowed to a company engaged in manufacturing alcoholic spirits or tobacco products. (ii) 100% deduction shall be allowed for the AY beginning on or after the 1st day of April, 2021 Company engaged in manufacturing of any article or providing specified services
35D An Indian company can amortize certain preliminary expenses (up to maximum of 5% of cost of the project or capital employed, whichever is more. Qualifying preliminary expenditure is allowable in each of 5 successive years beginning with the previous year in which the extension of undertaking is completed or the new unit commences production or operation. Indian Company
35DD Expenditure incurred after 31-3-1999 in respect of amalgamation or demerger can be amortized by an Indian Company Expenditure is allowed as deduction in five equal instalments in 5 previous years starting with the year in which amalgamation or demerger took place. Indian Company
35DDA Expenditure incurred under Voluntary Retirement Scheme is allowed as deduction. Each payment under VRS is allowed as deduction in five equal instalments in 5 previous years. All Assessee
35E Qualifying expenditure incurred by resident persons on prospecting for the minerals shall be allowed as deduction (Subject to certain conditions). Eligible expenditure is allowed as deduction in ten equal installments in 10 previous years. Resident persons
36(1)(i) Insurance premium covering risk of damage Actual expenditure incurred All Assessee
36(1)(i)a Insurance premium covering life of cattle owned by a member of co-operative society . Actual expenditure incurred All Assessee
36(1)(i)b Medical insurance premium paid by any mode other than cash, to insure employee’s health under (a) scheme framed by GIC of India and approved by Central Government; or (b) scheme by IRDA Actual expenditure incurred All Assessee
36(1)(ii) Bonus or commission paid to employees which would not have been payable as profit or dividend if it had not been paid as bonus or commission Actual expenditure incurred All Assessee
36(1)(iii) Interest on borrowed capital (Subject to certain conditions) Interest paid in respect of capital borrowed for the purposes of the business or profession shall be allowed as deduction. All Assessee
36(1)(iii)a Discount on Zero Coupon Bonds (Subject to certain conditions) Pro-rata amount of discount on zero coupon bonds shall be allowed as deduction over the life of such bond Specified Assessee
36(1)(iv) Employer’s contributions to recognized provident fund and approved superannuation fund Actual expenditure incurred All Assessee
36(1)(iv)(a) Any sum paid by assessee-employer by way of contribution towards a pension scheme, as referred to in section 80CCD, on account of an employee. Actual expenditure not exceeding 10% of the salary* of the employee *Salary = Basic Pay + Dearness Allowance (to the extent it forms part of retirement benefits)+ turnover based commission All Assessee – Employer
36(1)(v) Employer’s contribution towards approved gratuity fund created exclusively for the benefit of employees under an irrevocable trust shall be allowed as deduction. Actual expenditure not exceeding 8.33% of salary of each employee All Assessee – Employer
36(1)(va) Deposit of employee’s contributions in their respective provident fund or superannuation fund or any fund set up under Employees’ State Insurance Act, 1948 Actual amount received if credited to the employee’s account in relevant fund on or before due date specified under relevant Act All Assessee – Employer
36(1)(vi) Allowance in respect of animals which have died or become permanently useless. Actual cost of acquisition of such animals less realization on sale of carcasses of animals All Assessee
36(1)(vii) Bad debts which have been written off as irrecoverable (Subject to certain conditions) Actual bad debts which have been written off from books of accounts All Assessee
36(1)(viia) Deductions for provision for bad and doubtful debts created by certain banks, financial institutions and non-banking financial company Note Deduction in respect of bad debts actually written off under section 36(1)(vii) shall be limited to that amount of bad debts which exceed the provision for bad and doubtful debts created under section 36(1)(viia). Deductions for provision for bad and doubtful debts shall be limited to following: (a) In case of scheduled and non-scheduled banks: Sum not exceeding aggregate of 8.5% of total income (before any deductions under this provision and Chapter VI-A) and 10% of aggregate average advances made by rural branches of such bank; (b) In case of Financial Institutions: Up to 5% of total income before any deductions under this provision. (c) In case of foreign banks: Up to 5% of total income before any deductions under this provision and Chapter VI-A (d) In case of non-banking financial company: Up to 5% of total income before any deduction under this provision and chapter VI-A Banks, Public Financial Institutions, Non-banking financial company, State Financial Corporation, State Industrial Investment Corporations
36(1)(viii) Deduction under this provisions is allowed to following entities in respect of amount transferred to special reserve account: a) Financial Corporation which is engaged in providing long-term finance for industrial or agricultural development or development of infrastructure facility in India; or b) Public company registered in India with the main object of carrying on the business of providing long-term finance for construction house. Deduction shall be allowed to the extent of lower of following:
a) Amounts transferred to special reserve account
b) 20% of profits derived from eligible business
c) 200% of paid-up capital and general reserve (on last day of previous year) minusbalance in special reserve account (on first day of previous year)
Specified financial corporations or public company
36(1)(ix) Expenditure incurred by a company on promotion of family planning amongst employees is allowed as deduction Revenue expenditure is allowed as deduction &Capital expenditure shall be allowed as deduction in five equal installment in five years Company
All Assessee
All Assessee
36(1) (xii) Any expenditure incurred by a notified corporation or body corporate constituted or established by a Central, State Act. Actual expenditure incurred (not being in the nature of capital expenditure) Notified corporations concern.
36(1) (xiv) Contribution to Credit Guarantee Trust Fund for micro and small industries . Actual expenditure incurred Public Financial Institutions
36(1) (xv) Securities Transaction Tax paid Actual expenditure incurred if corresponding income is included as income under the head profits and gains of business or profession All Assessee
36(1) (xvi) Amount equal to commodities transaction tax paid by an assessee in respect of taxable commodities transactions entered into in the course of his business during the previous year is allowed as deduction Actual expenditure incurred if corresponding income is included as income under the head profits and gains of business or profession All Assessee
36(1) (xvii) Amount of expenditure incurred by a co-operative society engaged in the business of manufacture of sugar for purchase of sugarcane. Deduction would be allowed on lower case:
a) Actual purchase price of sugarcane, or
b) Price of sugarcane fixed or approved by the Government
Co-operative society engaged in the business of manufacture of sugar
37(1) Any other expenditure not being personal or capital expenditure and expenditure mentioned in sections 30 to 36 laid out wholly , exclusively for purposes of business. Actual expenditure incurred All Assessee
37(2)B Expenditure on advertisement in any souvenir, brochure etc. published by a political party shall not be allowed deduction Not Allowed All Assessee
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