Section 35D Amortisation of certain preliminary expenses

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The Tax Publishers [1][[2]35D. Amortisation of certain preliminary expenses. (1) Where an assessee, being an Indian company or a person (other than a company) who is resident in India, incurs, after the 31st day of March, 1970, any expenditure specified in sub-section (2), (i) before the commencement of his business, or (ii) after the commencement of his business in connection with the extension of his [3][undertaking] or in connection with his setting up a new [4][unit], the assessee shall, in accordance with and subject to the provisions of this section, be allowed a deduction of an amount equal to one-tenth of such expenditure for each of the ten successive previous years beginning with the previous year in which the business commences or, as the case may be, the previous year in which the extension of the [5][undertaking] is completed or the new [6][unit] commences production or operation: [7][Provided that where an assessee incurs after the 31st day of March, 1998, any expenditure specified in sub-section (2) the provisions of this sub-section shall have effect as if for the words an amount equal to one-tenth of such expenditure for each of the ten successive previous years, the words an amount equal to one-fifth of such expenditure for each of the five successive previous years had been substituted;] (2) The expenditure referred to in sub-section (1) shall be the expenditure specified in any one or more of the following clauses, namely : (a) expenditure in connection with (i) preparation of feasibility report; (ii) preparation of project report; (iii) conducting market survey or any other survey necessary for the business of the assessee; (iv) engineering services relating to the business of the assessee : [8][Provided that the assessee shall furnish a statement containing the particulars of expenditure specified in this clause within such period, to such income-tax authority, in such form and manner, as may be prescribed.] SUBSCRIBE FOR FULL CONTENT

The Tax Publishers

[1][[2]35D. Amortisation of certain preliminary expenses.

(1) Where an assessee, being an Indian company or a person (other than a company) who is resident in India, incurs, after the 31st day of March, 1970, any expenditure specified in sub-section (2),

(i) before the commencement of his business, or

(ii) after the commencement of his business in connection with the extension of his [3][undertaking] or in connection with his setting up a new [4][unit],

the assessee shall, in accordance with and subject to the provisions of this section, be allowed a deduction of an amount equal to one-tenth of such expenditure for each of the ten successive previous years beginning with the previous year in which the business commences or, as the case may be, the previous year in which the extension of the [5][undertaking] is completed or the new [6][unit] commences production or operation:

[7][Provided that where an assessee incurs after the 31st day of March, 1998, any expenditure specified in sub-section (2) the provisions of this sub-section shall have effect as if for the words an amount equal to one-tenth of such expenditure for each of the ten successive previous years, the words an amount equal to one-fifth of such expenditure for each of the five successive previous years had been substituted;]

(2) The expenditure referred to in sub-section (1) shall be the expenditure specified in any one or more of the following clauses, namely :

(a) expenditure in connection with

(i) preparation of feasibility report;

(ii) preparation of project report;

(iii) conducting market survey or any other survey necessary for the business of the assessee;

(iv) engineering services relating to the business of the assessee :

[8][Provided that the assessee shall furnish a statement containing the particulars of expenditure specified in this clause within such period, to such income-tax authority, in such form and manner, as may be prescribed.]