28/01/2019

Expenditure on eligible projects or scheme[Sec. 35AC] ( Author - Admin )


Deduction is available under section 35AC (up to the assessment year 2017-2018) for promoting social and economic welfare or uplift of the public :-

WHO CAN CLAIM DEDUCTION :- Any taxpayer can claim deduction under section 35AC as follows :-

A company :- Deduction is available if the taxpayer incurs any expenditure by  way of payment of any sum to a public sector company or a local authority or to an association or institution approved by the National Committee for carrying out any eligible project.

Direct expenditure on eligible project :- A company can also directly incur expenditure in respect of eligible project and claim the same as deduction. 


A person other than a company :- Deduction is available if the taxpayer incurs any expenditure by  way of payment of any sum to a public sector company or a local authority or to an association or institution approved by the National Committee for carrying out any eligible project.

Direct expenditure on eligible project :- Direct expenditure is not permitted .


In computing profits of business or profession chargeable to tax, a deduction is allowed in respect of the expenditure incurred for an eligible project or scheme for promoting social and economic welfare or upliftment of the public as may be specified by the Central Government on the recommendations of the National Committee. Companies shall, however, be allowed the deduction also in cases where the expenditure is incurred by them directly on an eligible project or scheme. 


CERTIFICATE FROM THE RECIPIENT/CHARTEREDACCOUNTANT :- The Claim for deduction should be supported by an audit certificate obtained from the public sector company, local authority or approved association or institution to whom the payment is made in Form No. 58A, or from the chartered accountant in cases where the claim is in respect of expenditure directly incurred by a company on an eligible project or scheme in Form No. 58B. 

ELIGIBLE PROJECT/SCHEME  :- “Eligible project or scheme" means such project or scheme for promoting the social  and economic welfare of, or the upliftment of, the public as the Central Government may, by notification in the official Gazette, specify in this behalf on the recommendations of the National  Committee).

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