Section 32AC of Income Tax Act "Investment in new plant or machinery"
32AC. (1) Where an assessee, being a company, engaged in
the business of manufacture or production of any article or
thing, acquires and installs new asset after the 31st day of
March, 2013 but before the 1st day of April, 2015 and the
aggregate amount of actual cost of such new assets exceeds
one hundred crore rupees, then, there shall be allowed a
deduction,-
(a) for the assessment year commencing on the 1st day of
April, 2014, of a sum equal to fifteen per cent of the
actual cost of new assets acquired and installed after the
31st day of March, 2013 but before the 1st day of April,
2014, if the aggregate amount of actual cost of such new
assets exceeds one hundred crore rupees; and
(b) for the assessment year commencing on the 1st day of
April, 2015, of a sum equal to fifteen per cent of the
actual cost of new assets acquired and installed after the
31st day of March, 2013 but before the 1st day of April,
2015, as reduced by the amount of deduction allowed, if any,
under clause (a).
(1A) Where an assessee, being a company, engaged in the
business of manufacture or production of any article or
thing, acquires and installs new assets and the amount of
actual cost of such new assets acquired during any previous
year exceeds twenty-five crore rupees and such assets are
installed on or before the 31st day of March, 2017, then,
there shall be allowed a deduction of a sum equal to fifteen
per cent of the actual cost of such new assets for the
assessment year relevant to that previous year:
Provided that where the installation of the new assets are
in a year other than the year of acquisition, the deduction
under this sub-section shall be allowed in the year in which
the new assets are installed:
Provided further that no deduction under this sub-section
shall be allowed for the assessment year commencing on the
1st day of April, 2015 to the assessee, which is eligible to
claim deduction under sub-section (1) for the said
assessment year.
(1B) No deduction under sub-section (1A) shall be allowed
for any assessment year commencing on or after the 1st day
of April, 2018.
(2) If any new asset acquired and installed by the
assessee is sold or otherwise transferred, except in
connection with the amalgamation or demerger, within a
period of five years from the date of its installation, the
amount of deduction allowed under sub-section (1) or
sub-section (1A) in respect of such new asset shall be
deemed to be the income of the assessee chargeable under the
head "Profits and gains of business or profession" of the
previous year in which such new asset is sold or otherwise
transferred, in addition to taxability of gains, arising on
account of transfer of such new asset.
(3) Where the new asset is sold or otherwise transferred in
connection with the amalgamation or demerger within a period
of five years from the date of its installation, the
provisions of sub-section (2) shall apply to the amalgamated
company or the resulting company, as the case may be, as
they would have applied to the amalgamating company or the
demerged company.
(4) For the purposes of this section, "new asset" means any
new plant or machinery (other than ship or aircraft) but
does not include-
(i) any plant or machinery which before its installation by
the assessee was used either within or outside India by any
other person;
(ii) any plant or machinery installed in any office premises
or any residential accommodation, including accommodation in
the nature of a guest house;
(iii) any office appliances including computers or computer
software;
(iv) any vehicle; or
(v) any plant or machinery, the whole of the actual cost of
which is allowed as deduction (whether by way of
depreciation or otherwise) in computing the income
chargeable under the head "Profits and gains of business or
profession" of any previous year.
What is Profits and gains of business or profession? Section 28 of Income Tax Act 1961
What is Repairs and insurance of machinery, plant and furniture? Section 31 of Income Tax Act 1961
What is Depreciation? Section 32 of Income Tax Act 1961
What is Investment allowance? Section 32A of Income Tax Act 1961
What is Investment deposit account? Section 32AB of Income Tax Act 1961
What is Investment in new plant or machinery? Section 32AC of Income Tax Act 1961