Extending benefit of initial depreciation to the power sector

Section 32(1)(iia) provides for allowance of initial depreciation (in addition to normal depreciation) at the rate of 20% of the actual cost on new machinery or plant (other than ships and aircraft) to the assessee engaged in the business of manufacture or production of any article or thing in the year of acquisition and instalment. Under the existing provisions, the benefit of initial depreciation is not available on the new machinery or plant installed by an assessee engaged in the business of generation or generation and distribution of power.

In  order to encourage new investment by the assessees engaged in the business of generation or  generation and distribution of power, it is proposed to amend this section to provide that an assessee engaged in the business of generation or generation and distribution of power shall also be allowed initial depreciation at the rate of 20% of actual cost of new machinery or plant (other than ships and aircraft) acquired and installed in a previous year.

This amendment will take effect from 1st April, 2013 and will, accordingly, apply in relation to the  assessment year 2013-14  and subsequent assessment years.

More Under Income Tax

Posted Under

Category : Income Tax (27247)
Type : Articles (16742)
Tags : Budget (1956) section 32 (142)

Leave a Reply

Your email address will not be published. Required fields are marked *