Section 32AD – Investment if new plant or machinery in notified backward areas in certain states

1. Eligible assessee – Any assesse i.e. Company or non – corporates

2. Quantum of deduction – Deduction @ 15% of the actual cost of the new asset installed.

3. Condition of setting up new undertaking – Assessee should set up an undertaking for manufacturing or production of any article or thing on or after 01-04-2015

4. Location – Undertaking should be set up in any notified backward area in the state of Andhra Pradesh or Bihar or Telangana or West Bengal.

5. Actual cost of asset which deduction is available – Actual cost shall be computedas per section 43(1).

6. Conditions for deduction –

i) deduction shall be available in the year in which asset is installed.

ii) If new asset acquired and installed is sold or otherwise transferred, within a period of five years from the date of itsinstallation, the amount of deduction allowed shall be deemed to be the income of assesse chargeable under the head PGBP.

iii) This deduction is in addition to the depreciation and additional depreciation.

iv) This deduction shall be available on computers if computers are integral part of production system.

v) This deduction shall not be reduced from the WDV of the block ofasset.

vi) This deduction is not available to power generating units.

vii) This deduction shall not be restricted to 50% if plant and machinery purchased and installed is used for less than 180 days during the previous year.

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