Section 32AD INVESTMENT ALLOWANCE FOR NOTIFIED
Conditions to be Fulfilled (Eligible Assessce)
Benefit u/s 32AD is available to all kinds
of assessees (corporate as well as non-corporate assessees).
sets up an undertaking/enterprise for manufacture or production of any article
or thing on or after April 1, 2015.
must be set up in any backward area (notified by the Central Government) in
Bihar, Telengana and West Bengal.
The assessee acquires and installs a new plant
and machinery' for the purposes of such undertaking on or after April 1, 2015 but before
April 1, 2020.
Meaning of 'New Plant & Machinery' '
New plant & machinery' does not include:
Second hand plant &
machinery whether Indian
or imported (ie
P&M should be brand new)
& machinery installed in any office
premises or any
residential accommodation like
guest houses (ie plant & machinery should be installed
Any office appliances including computers or computer
Any vehicle, ship or aircraft
Any plant &
machinery, the actual
cost of which
is allowed to be debited
to P&L A/c (ie plant &
machinery for which
deduction is claimed
u/s 35, 35AD,
An investment allowance of 15% of the aggregate investment in 'new
plant & machinery' acquired and installed is available in the year
in which such
new asset is installed.
Note: The amount of investment allowance shall not be reduced to arrive at the WDV of the
plant & machinery.
Period of 5 Years
in respect of which investment allowance has been claimed u/s 32AD must
not be transferred for a period of 5 years from the date
of its installation.
If such plant & machinery is sold/transferred within
a period of 5 years,
deduction allowed earner
shall be deemed as PGBP income
of the previous year in which
such plant &
machinery has been
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