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Expenditure on Eligible Project/Scheme – Section 35AC

Deduction is available under this section if expenditure is incurred by assessee  in respect of

  1. Payment 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 or scheme.
  2. Direct expenditure for any eligible project or scheme (allowed only in case of a company)

If a deduction is claimed and allowed under section 35AC, the same is not allowed as a deduction in any other provisions of the Act.

The following certificates are required for claiming deduction

  1. If payment is made – In form 58A by the receiver
  2. If direct expenditure is made by company- In form 58B by the Chartered Accountant

In a case where payment is made to the specified persons and subsequently its approval is withdrawn, deduction is not denied.

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