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6. Amendment of section 35D. |
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—In section 35D of the Income-tax Act, with effect from the 1st day of April, 2009,—
(a) for the words "industrial undertaking", wherever they occur, the word "undertaking" shall be substituted;
(b) for the words "industrial unit", wherever they occur, the word "unit" shall be substituted.
Clause 6 seeks to amend section 35D of the Income-tax Act, relating to amortisation of certain preliminary expenses.
Under the existing provisions of the said section, deduction for certain specified preliminary expenses in computing business income is allowed. The deduction is allowed at an amount equal to 1/5th of such expenditure for five successive previous years.
The preliminary expenses relate either to the period before the commencement of business or after. However, if preliminary expenses relate to a period after the commencement of business, such expenses are only allowed if they are in relation to the extension of an industrial undertaking or the setting up of a new industrial unit.
The proposed amendment seeks to substitute the words "industrial undertaking" with the word "undertaking" and the words "industrial unit" with the word "unit", wherever they occur in the said section. This is intended to provide benefit of amortisation of specified post commencement preliminary expenses to all sectors for the extention of an undertaking or the setting up of a new unit.
This amendment will take effect from 1st April, 2009 and will accordingly apply in relation to the assessment year 2009-10 and subsequent assessment years.
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