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Expenditure on Notified Agricultural Extension Project [Section 35CCC]

Deduction shall be allowed on account of any expenditure incurred by the assessee on agricultural extension project notified by the Board in this behalf in accordance with the guidelines as may be prescribed

Quantum of Deduction :     

150% of such expenditure incurred during the previous year for the assessment years 2013-14 to 2020-21

[from the assessment year 2021-22, an assessee can claim 100 % of expenditure as deduction (but not weighted deduction)].

Important Points : The following points should be noted -

  1. Project shall be undertaken by an assessee for training, education and guidance of farmers.

  2. Project shall have prior approval of the Ministry of Agriculture.

  3. Expenditure (not being cost of land/building) exceeding Rs. 25 lakh is expected to be incurred for the project.

  4. For getting approval for the purpose of claiming weighted deduction under section 35CCC, an application in Form No. 3C-O should be submitted to the Member (IT), CBDT.

  5. Application shall be accompanied by –

    1. a detailed note on the agricultural extension project;

    2. details of the expenditure expected to be incurred and expected date of completion; and

    3. approving letter of Ministry of Agriculture.

  6. No Deduction Under any Other Section. Where such expenditure is claimed and allowed under this section for any assessment year, no deduction shall be allowed in respect of such expenditure under any other provisions of the Income Tax Act for the same or any assessment year.

Topics...on ‘Profits and Gains of Business or Profession’

Define … ‘Profits and Gains of Business or Profession’ and its Computation (Section 28)
Method of Accounting for Computing Business Income (Section 145)
Principles for Allowing Business Deductions / Allowances from Profits and Gains of Business or Profession.
Expenses Allowed as Deductions against Profits and Gains of Business or Profession [Section-30-37]
[Section 37(1)] : General Or Allowable Deductions under Business or Professions
Business Losses Deductible under the head  'Profits and Gains of Business or Profession'.
Expenses Not Deductible under the head 'Profits and Gains of Business or Profession (Section 40, 40A, 43B)
DEEMED PROFITS Chargeable to Tax as Business Income Under Profits and Gains of Business or Professions [Section 41]
Taxation of Undisclosed Business Income/Investments from Undisclosed Sources
Deduction in respect of Expenditure incurred on setting up of a Specified Business [Section-35AD] :
When Maintenance of Books of Accounts becomes Compulsory (Section 44AA)
Compulsory Audit of Books of Accounts by Chartered Accountant (Section 44AB)
Computation of Income On Estimated Basis Under Sections 44AD, 44ADA and 44AE

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