The company assessees are allowed a eduction in respect of the bona fide revenue expenditure incurred by them for the purpose of promoting family planning amongst its employees. If the amount of such expenditure is more than available business profit, it shall result in business loss for the previous year shall be treated accordingly.
In case where capital expenditure is incurred for family planning purposes, the expenditure will be spread over a period of five years and every year one instalment will be allowed as deduction eginning from the previous year in which expenditure was incurred. The deduction for such expense hall be allowed to the extent of available business profit for the previous year. The unabsorbed capital xpenditure on family planning shall be set-off and carry forward like unabsorbed depreciation.
Important points :
(a) No depreciation u/s 32 shall be allowed on capital expenditure incurred/capital asset acquired to promote family planning amongst employees.
(b) Expenditure on family planning incurred by a non corporate assessee (i.e. individual, HUF, Firm etc.) is not allowed as deduction u/s 36(l)(ix). However, a non-corporate assessee can claim deduction only in respect of revenue expenditure incurred on family planning u/s section 37(1). Thus, capital expenditure incurred on family planning incurred by a noncorporate assessee is not allowed as deduction at all.