35 ad

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

16 July 2013 sir, i want to avail the sec35ad hospitals, one of my client intrested to avail 35 ad can u explain brefily

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C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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25 August 2013 Deduction in respect of capital expenditure on specified business [Amendment of Section 35AD]
Three new businesses specified
It is proposed to include three new businesses as “specified business” for the purposes of the investment-linked deduction under section 35AD, namely:-
a) setting up and operating an inland container depot or a container freight station notified or approved under the Customs Act, 1962 (52 of 1962);
b) bee-keeping and production of honey and beeswax; and
c) setting up and operating a warehousing facility for storage of sugar.
The date of commencement of operations for availing investment linked deduction in respect of the three new specified businesses shall be on or after 1st April, 2012.
150% deduction in certain sectors
It is also proposed that the following specified businesses commencing operations on or after the 1st of April, 2012 shall be allowed a deduction of 150% of the capital expenditure under section 35AD of the Income-tax Act, namely:-
(i) setting up and operating a cold chain facility;
(ii) setting up and operating a warehousing facility for storage of agricultural produce;
(iii) building and operating, anywhere in India, a hospital with at least one hundred beds for patients;
(iv) developing and building a housing project under a scheme for affordable housing framed by the Central Government or a State Government, as the case may be, and notified by the Board in this behalf in accordance with the guidelines as may be prescribed; and
(v) production of fertilizer in India.
Clarification for hotel industry
A clarification is proposed to be inserted to make clear that a hotel owner will continue to be eligible for the investment linked deduction under section 35AD if he, while continuing to own the hotel, transfers the operation of such hotel to another person.
Accordingly, a new sub-section (1A) is proposed to be inserted in section 35AD to provide that where the assessee builds a hotel of two-star or above category as classified by the Central Government and subsequently, while continuing to own the hotel, transfers the operation thereof to another person, the assessee shall be deemed to be carrying on the specified business of building and operating hotel.
It is important to note that Assessees other than companies shall not be liable to pay Alternate Minimum Tax (AMT) u/s 115JC if they claim investment linked deduction u/s 35AD or similar such provisions.