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Deduction u/s 35AD in subsequent years

mrunal (student) (41 Points)

05 October 2018

If assessee claim deduction u/s 35AD in first year and have b/f loss from it.
In next year also business have huge capital investment.
Then can assessee claim 100% deduction in subsequent years also or deduction is allowed in first year only.

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5 Replies

HARI KRISHNA GADDAM (64 Points)
Replied 05 October 2018

claim 100 percent depreciation and carry forward to subsequent years

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Ashwin P. Gohil (auditor) (231 Points)
Replied 05 October 2018

yes deduction u/s 35AD is allowed in every year whenever capital expenditure is incurred

Rakesh Joshi (CA Final) (1272 Points)
Replied 05 October 2018

As per Sec 35AD the deduction in respect of expenditure for specified business allowed in the year in which such expenditure is incurred.

In the subsequent year if the capital expenditure is in the nature specified u/s 35AD then deduction can be claimed fully. Otherwise Deduction u/s 32 is can be claimed.

mrunal (student) (41 Points)
Replied 06 October 2018

but in proviso word 'year in which commences operation ' is used.....

Rakesh Joshi (CA Final) (1272 Points)
Replied 06 October 2018

Please read the proviso fully.

The proviso to Section 35AD(1) says that

The deduction in respect of capital expenditure on specified business is allowed in the year of commencement of operation when the expenditure is incurred proior to commencement of operation of business OR the expenditure is capitalised in the books as on the date of commencement of operation.