Income from manufacture of Tea, coffee and Rubber Section 33AB – Tea development account,coffee development account and rubber development account.


1.Eligible assesse – All assesse engaged in the business of growing and manufacturing tea, coffee or rubber in India.

2.Quantum of deduction – Lower of the following

  • a. Amount deposited in NABARD or deposit account
  • b. 40% of PGBP of such business before deduction under section 33AB.

3.Conditions for deduction –

  • i) Assessee must deposit any amount in
    • a. an account with NABARD; or
    • b. a deposit account under the scheme framed by Tea Board or the Coffee Board or the Rubber Board.
  • ii) Amount must be deposited before the due date of furnishing the return of income.

4. Deduction to be allowed before setting of brought forward losses.

5. Deduction under this section is given from the composite income from business of growing and manufacturing tea/coffee/rubber. It is not given from non-exempt portion.

6. Withdrawal of amount from NABARD/ Deposit Account – Any amount can be withdrawn from NABARD/ Deposit account for the purpose specified in the scheme of Tea/ Coffee/ Rubber Board, as the case may be, or in the following circumstances –

  • a. Closure of business – Taxable under PGBP in the year of withdrawal.
  • b. death of as assesse – Not Taxable
  • c. Partition of HUF – Not taxable
  • d. dissolution of Firm - Taxable under PGBP in the year of withdrawal.
  • e. Liquidation of company – Not Taxable

7. Where amount in NABARD/ Deposit account is used as per scheme for the purpose of revenue expenditure, such expenditure shall not be allowed as deduction in computing PGBP.

8. Where amount withdrawn from NABARD/ Deposit account is used as per the scheme for purchase of any plant & machinery, depreciation shall be allowed on such plant & machinery.

Rule 7A – Income from manufacture of Rubber

Income derived from the sale of rubber obtained from rubber plants grown by the seller in India shall be computed as if it were income derived from business, and 35% of such income shall be liable to tax.

Rule 7B – Income from manufacture of coffee

  • i) Income derived from the sale of coffee grown and cured by the seller in India shall be computed as if it were income derived from business, and 25% of such income shall be deemed to be income liable to tax.
  • ii) Income derived from the sale of coffee grown, cured, roasted and grounded by the seller in India, with or without mixing chicory or other flavoring ingredients, shall be computed as if it were income derived from business, and 40% of such income shall be deemed to be income liable to tax.

Rule 8 – Income from manufacture of Tea :
Income derived from the sale of tea grown and manufactured by the seller in India shall be computed as if it was income derived from business and 40% of such income shall be deemed to be income liable to tax.