Section 35e

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Divya (Querist)
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25 March 2015 As per section 35E, deduction lower of 1/10 th of qualifying amount or income is the previous year is allowed.. In case the income of PY is lower, the balance of 1/10th shall lapse and be disallowed or shall it be allowed in future years?

CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)
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25 March 2015 The amount of the instalment relating to any relevant previous year, to the extent to which it remains unallowed, shall be carried forward and added to the instalment relating to the previous year next following and deemed to be part of that instalment, and so on, for succeeding previous years, so, however, that no part of any instalment shall be carried forward beyond the tenth previous year as reckoned from the year of commercial production.

Accordingly, the amount which could not allowed in the current year can be added in the next year but not beyond 10th year