Section 32 - Depreciation - Income-tax Act, 1961

Depreciation. 32. (1) 1 [ In respect of depreciation of- ( i ) buildings, machinery, plant or furniture, being tangible assets; ( ii ) know-how, patents, copyrights, trade marks, licences, franchises or any other business or commercial rights of similar nature, being intangible assets acquired on or after the 1st day of April, 1998, 34 [ not being goodwill of a business or profession, ] owned, wholly or partly, by the assessee and used for the purposes of the business or profession, the following deductions shall be allowed -] 2 [ ( i ) in the case of assets of an undertaking engaged in generation or generation and distribution of power, such percentage on the actual cost thereof to the assessee as may be prescribed; ] ( ii ) 3 [ in the case of any block of assets, such percentage on the written down value thereof as may be prescribed: ] 4 [ *** ] 5 [Provided 6 [ *** ] that no deduction shall be allowed under this clause in respect of- ( a ) any motor car manufactured outside India, where such motor car is acquired by the assessee after the 28th day of February, 1975 7 [ but before the 1st day of April, 2001 ], unless it is used- ( i ) in a business of running it on hire for tourists; or ( ii ) outside India in his business or profession in another country; and ( b ) any machinery or plant if the actual cost thereof is allowed as a deduction in one or more years under an agreement entered into by the Central Government under section 42: ] 8 [Provided further that where an asset referred to in clause ( i ) or clause ( ii ) 9 [ or clause ( iia ) ] , 29 [ or the first proviso to clause (iia) ] as the case may be, is acquired by the assessee during the previous year and is put to use for the purposes of business or profession for a period of less than one hundred and eighty days in that previous year, the deduction under this sub-section in respect of such asset shall be restricted to fifty per cent of the amount calculated at the percentage prescribed for an asset under clause ( i ) or clause ( ii ) 10 [ or clause ( iia ) ] , as the case may be :] 30 [Provided also that where an asset referred to in clause (iia) or the first proviso to clause (iia), as the case may be, is acquired by the assessee during the previous year and is put to use for the purposes of business for a period of less than one hundred and eighty days in that previous year, and the deduction under this sub-section in respect of such asset is restricted to fifty per cent. of the amount calculated at the percentage prescribed for an asset under clause (iia) for that previous year, then, the deduction for the balance fifty per cent. of the amount calculated at the percentage prescribed for such asset under clause (iia) shall be allowed under this sub-section in the immediately succeeding previous year in respect of such asset: ] 11 [Provided also that where an asset being commercial vehicle is acquired by the assessee on or after the 1st day of October, 1998 but before the 1st day of April, 1999 and is put to use before the 1st day of April, 1999 for the purposes of business or profession, the deduction in respect of such asset shall be allowed on such percentage on the written down value thereof as may be prescribed. Explanation.- For the purposes of this proviso,- ( a ) the expression commercial vehicle means heavy goods vehicle , heavy passenger motor vehicle , light motor vehicle , medium goods vehicle and medium passenger motor vehicle but does not include maxi-cab , motor-cab , tractor and road-roller ; ( b ) the expressions heavy goods vehicle , heavy passenger motor vehicle , light motor vehicle , medium goods vehicle , medium passenger motor vehicle , maxi-cab , motor-cab , tractor and road roller shall have the meanings respectively as assigned to them in section 2 of the Motor Vehicles Act, 1988 (59 of 1988): ] 12 [Provided also that, in respect of the previous year relevant to the assessment year commencing on the 1st day of April, 1991, the deduction in relation to any block of assets under this clause shall, in the case of a company, be restricted to seventy-five per cent of the amount calculated at the percentage, on the written down value of such assets, prescribed under this Act immediately before the commencement of the Taxation Laws (Amendment) Act, 1991: ] 13 [Provided also that the aggregate deduction, in respect of depreciation of buildings, machinery, plant or furniture, being tangible assets or know-how, patents, copyrights, trademarks, licences, franchises or any other business or commercial rights of similar nature, being intangible assets allowable to the predecessor and the successor in the case of succession referred to in 27 [ clause (xiii), clause (xiiib) and clause (xiv) ] of section 47 or section 170 or to the amalgamating company and the amalgamated company in the case of amalgamation, or to the demerged company and the resulting company in the case of demerger, as the case may be, shall not exceed in any previous year the deduction calculated at the prescribed rates as if the succession or the amalgamation or the demerger, as the case may be, had not taken place, and such deduction shall be apportioned between the predecessor and the successor, or the amalgamating company and the amalgamated company, or the demerged company and the resulting company, as the case may be, in the ratio of the number of days for which the assets were used by them .] 14 [ Explanation 1. -Where the business or profession of the assessee is carried on in a building not owned by him but in respect of which the assessee holds a lease or other right of occupancy and any capital expenditure is incurred by the assessee for the purposes of the business or profession on the construction of any structure or doing of any work in or in relation to, and by way of renovation or extension of, or improvement to, the building, then, the provisions of this clause shall apply as if the said structure or work is a building owned by the assessee. Explanation 2. -For the purposes of this 15 [ sub-section ] written down value of the block of assets shall have the same meaning as in clause ( c ) of sub-section ( 6 ) of section 43. ] 16 [ Explanation 3.- For the purposes of this sub-section, 26 [ the expression assets ] shall mean- ( a ) tangible assets, being buildings, machinery, plant or furniture; ( b ) intangible assets, being know-how, patents, copyrights, trade marks, licences, franchises or any other business or commercial rights of similar nature 35 [ , not being goodwill of a business or profession ] . Explanation 4.- For the purposes of this sub-section, the expression know-how means any industrial information or technique likely to assist in the manufacture or processing of goods or in the working of a mine, oil-well or other sources of mineral deposits (including searching for discovery or testing of deposits for the winning of access thereto). 17 [ Explanation 5.- For the removal of doubts, it is hereby declared that the provisions of this sub-section shall apply whether or not the assessee has claimed the deduction in respect of depreciation in computing his total income ;] 18 [ ( iia ) in the case of any new machinery or plant (other than ships and aircraft), which has been acquired and installed after the 31st day of March, 2005, by an assessee engaged in the business of manufacture or production of any article or thing, 28 [ 33 [ or in the business of generation, transmission or distribution ] of power ] a further sum equal to twenty per cent of the actual cost of such machinery or plant shall be allowed as deduction under clause ( ii ) : 32 [Provided that where an assessee, sets up an undertaking or enterprise for manufacture or production of any article or thing, on or after the 1st day of April, 2015 in any backward area notified by the Central Government in this behalf, in the State of Andhra Pradesh or in the State of Bihar or in the State of Telangana or in the State of West Bengal and acquires and installs any new machinery or plant (other than ships and aircraft) for the purposes of the said undertaking or enterprise during the period beginning on the 1st day of April, 2015 and ending before the 1 st day of April, 2020 in the said backward area, then, the provisions of clause (iia) shall have effect, as if for the words twenty per cent. , the words thirty-five per cent. had been substituted. ] 31 [Provided further] that no deduction shall be allowed in respect of- ( A ) any machinery or plant which, before its installation by the assessee, was used either within or outside India by any other person; or ( B ) any machinery or plant installed in any office premises or any residential accommodation, including accommodation in the nature of a guest-house; or ( C ) any office appliances or road transport vehicles; or ( D ) any machinery or plant, the whole of the actual cost of which is allowed as a deduction (whether by way of depreciation or otherwise) in computing the income chargeable under the head Profits and gains of business or profession of any one previous year; ] 19 [ ( iii ) in the case of any building, machinery, plant or furniture in respect of which depreciation is claimed and allowed under clause ( i ) and which is sold, discarded, demolished or destroyed in the previous year (other than the previous year in which it is first brought into use), the amount by which the moneys payable in respect of such building, machinery, plant or furniture, together with the amount of scrap value, if any, fall short of the written down value thereof : Provided that such deficiency is actually written off in the books of the assessee. Explanation.- For the purposes of this clause,- ( 1 ) moneys payable in respect of any building, machinery, plant or furniture includes- ( a ) any insurance, salvage or compensation moneys payable in respect thereof; ( b ) where the building, machinery, plant or furniture is sold, the price for which it is sold, so, however, that where the actual cost of a motor car is, in accordance with the proviso to clause ( 1 ) of section 43, taken to be twenty-five thousand rupees, the moneys payable in respect of such motor car shall be taken to be a sum which bears to the amount for which the motor car is sold or, as the case may be, the amount of any insurance, salvage or compensation moneys payable in respect thereof (including the amount of scrap value, if any) the same proportion as the amount of twenty-five thousand rupees bears to the actual cost of the motor car to the assessee as it would have been computed before applying the said proviso; ( 2 ) sold includes a transfer by way of exchange or a compulsory acquisition under any law for the time being in force but does not include a transfer, in a scheme of amalgamation, of any asset by the amalgamating company to the amalgamated company where the amalgamated company is 20 [ an Indian company or in a scheme of amalgamation of a banking company, as referred to in clause ( c ) of section 5 of the Banking Regulation Act, 1949 (10 of 1949) with a banking institution as referred to in sub-section (15) of section 45 of the said Act, sanctioned and brought into force by the Central Government under sub-section (7) of section 45 of that Act, of any asset by the banking company to the banking institution .]] ( iv ) 21 [ *** ] ( v ) 22 [ *** ] ( vi ) 23 [ *** ] (1A) 24 [ *** ] 25 [ (2) Where, in the assessment of the assessee, full effect cannot be given to any allowance under sub-section (1) in any previous year, owing to there being no profits or gains chargeable for that previous year, or owing to the profits or gains chargeable being less than the allowance, then, subject to the provisions of sub-section (2) of section 72 and sub-section (3) of section 73, the allowance or the part of the allowance to which effect has not been given, as the case may be, shall be added to the amount of the allowance for depreciation for the following previous year and deemed to be part of that allowance, or if there is no such allowance for that previous year, be deemed to be the allowance for that previous year, and so on for the succeeding previous years. ] ******************** NOTES:- 1. Substituted vide Section 9 of the Finance (No. 2) Act, 1998 w.e.f. 01-04-1999 before it was read as, In respect of depreciation of buildings, machinery, plant or furniture owned, wholly or partly, by the assessee and used for the purposes of the business or profession, the following deductions shall, subject to the provisions of section 34, be allowed- Earlier , Amended vide Section 11 of the Finance (No. 2) Act, 1996 w.e.f. 01-04-1997 2. Inserted vide Section 2 of the Income-tax (Amendment) Act, 1998 w.e.f. 01-04-1998 Earlier , Substituted vide Section 8 of the Taxation Laws (Amendment) Act, 1975 w.e.f. 01-04-1976 before it was read as, (i) in the case of ships other than ships ordinarily plying on inland waters, such percentage on the actual cost thereof to the assessee as may in any case or class of cases be prescribed; And was Omitted vide Section 5 of the Taxation Laws (Amendment Miscellaneous Provisions) Act, 1986 w.e.f. 01-04-1988 before it was read as, (i) in the case of ships other than ships ordinarily plying on inland waters, such percentage on the actual cost thereof to the assessee as may, in any case or class of cases or in respect of any period or periods, be prescribed: Provided that different percentages may be prescribed for different periods having regard to the date of acquisition of the ship; 3. Substituted vide Section 5 of the Taxation Laws (Amendment and Miscellaneous Provisions) Act, 1986 w.e.f. 01-04-1988 before it was read as, in the case of buildings, machinery, plant or furniture, other than ships covered by clause (i), such percentage on the written down value thereof as may in any case or class of cases be prescribed : 4. Omitted vide Section 7 of the Finance Act, 1995 w.e.f. 01-04-1996 before it was read as, Provided that where the actual cost of any machinery or plant does not exceed five thousand rupees, the actual cost thereof shall be allowed as a deduction in respect of the previous year in which such machinery or plant is first put to use by the assessee for the purposes of his business or profession : Earlier , Inserted vide Section 6 of the Finance Act, 1966 w.e.f. 01-04-1966 And was Amended vide Section 10 of the Finance Act, 1983 w.e.f. 01-04-1984 5. Substituted vide Section 11 of the Finance (No. 2) Act, 1991 w.e.f. 01-04-1992 before it was read as, Provided further that no deduction shall be allowed under this clause in respect of any motor car manufactured outside India, where such motor-car is acquired by the assessee after the 28th day of February, 1975 and is used otherwise than in a business of running it on hire for tourists; Earlier , Inserted vide Section 4 of the Finance Act, 1975 w.e.f. 01-04-1975 And was Amended vide Section 5 of the Taxation Laws (Amendment and Miscellaneous Provisions) Act, 1986 w.e.f. 01-04-1988 6. Omitted vide Section 7 of the Finance Act, 1995 w.e.f. 01-04-1996 before it was read as, further 7. Inserted vide Section 21 of the Finance Act, 2001 w.e.f. 01-04-2002 8. Substituted vide Section 2 of the Income-tax (Amendment) Act, 1998 w.e.f. 01-04-1998 before it was read as, Provided further that where any asset falling within a block of assets is acquired by the assessee during the previous year and is put to use for the purposes of business or profession for a period of less than one hundred and eighty days in that previous year, the deduction under this clause in respect of such asset shall be restricted to fifty per cent of the amount calculated at the percentage prescribed under this clause in the case of block of assets comprising such asset : Earlier , Inserted vide Section 11 of the Finance (No. 2) Act, 1991 w.e.f. 01-04-1992 And was Amended vide Section 7 of the Finance Act, 1995 w.e.f. 01-04-1996 9. Inserted vide Section 14 of the Finance Act, 2002 w.e.f. 01-04-2003 10. Inserted vide Section 14 of the Finance Act, 2002 w.e.f. 01-04-2003 11. Inserted vide Section 5 of the Income-tax (Second Amendment) Act, 1998 w.e.f. 01-04-1999 12. Inserted vide Section 4 of the Taxation Laws (Amendment) Act, 1991 w.e.f. 15-01-1991 13. Substituted vide Section 12 of the Finance Act, 1999 w.e.f. 01-04-2000 before it was read as, Provided also that the aggregate deduction, in respect of depreciation of buildings, machinery, plant or furniture, being tangible asset or know-how, patents, copyrights, trade marks, licences, franchises or any other business or commercial rights of similar nature, being intangible assets allowable to the predecessor and the successor in the case of succession, referred to in clause (xiii) and clause (xiv) of section 47 or section 170 or the amalgamating company and the amalgamated company in the case of amalgamation, as the case may be, shall not exceed in any previous year the deduction calculated at the prescribed rates as if the succession or the amalgamation had not taken place, and such deduction shall be apportioned between the predecessor and the successor, or the amalgamating company and the amalgamated company, as the case may be, in the ratio of the number of days for which the assets were used by them. Earlier , Inserted vide Section 11 of the Finance (No. 2) Act, 1996 w.e.f. 01-04-1997 And was Amended vide Section 9 of the Finance (No. 2) Act, 1998 w.e.f. 01-04-1999 14. Inserted vide Section 5 of the Taxation Laws (Amendment and Miscellaneous Provisions) Act, 1986 w.e.f. 01-04-1988 . 15. Substituted vide Section 14 of the Finance Act, 2002 w.e.f. 01-04-2003 before it was read as, clause 16. Inserted vide Section 9 of the Finance (No. 2) Act, 1998 w.e.f. 01-04-1999 17. Inserted vide Section 21 of the Finance Act, 2001 w.e.f. 01-04-2002 18. Substituted vide Section 8 of the Finance Act, 2005 w.e.f. 01-04-2006 before it was read as, (iia) in the case of any new machinery or plant (other than ships and aircraft), which has been acquired and installed after the 31st day of March, 2002, by an assessee engaged in the business of manufacture or production of any article or thing, a further sum equal to fifteen per cent of the actual cost of such machinery or plant shall be allowed as deduction under clause (ii): Provided that such further deduction of fifteen per cent shall be allowed to- (A) a new industrial undertaking during any previous year in which such undertaking begins to manufacture or produce any article or thing on or after the 1st day of April, 2002; or (B) any industrial undertaking existing before the 1st day of April, 2002, during any previous year in which it achieves the substantial expansion by way of increase in installed capacity by not less than ten per cent: Provided further that no deduction shall be allowed in respect of- (a) any machinery or plant which, before its installation by the assessee, was used either within or outside India by any other person; or (b) any machinery or plant installed in any office premises or any residential accommodation, including accommodation in the nature of a guest house; or (c) any office appliances or road transport vehicles; or (d) any machinery or plant, the whole of the actual cost of which is allowed as a deduction (whether by way of depreciation or otherwise) in computing the income chargeable under the head Profits and gains of business or profession of any one previous year: Provided also that no deduction shall be allowed under clause (A) or, as the case may be, clause (B), of the first proviso unless the assessee furnishes the details of machinery or plant and increase in the installed capacity of production in such form, as may be prescribed along with the return of income, and the report of an accountant, as defined in the Explanation below sub-section (2) of section 288 certifying that the deduction has been correctly claimed in accordance with the provisions of this clause. Explanation .-For the purposes of this clause,- (1) new industrial undertaking means an undertaking which is not formed,- (a) by the splitting up, or the reconstruction, of a business already in existence; or (b) by the transfer to a new business of machinery or plant previously used for any purpose; (2) installed capacity means the capacity of production as existing on the 31st day of March, 2002; Earlier , Inserted vide Section 6 of the Finance (No. 2) Act, 1980 w.e.f. 01-04-1981 And was Omitted vide Section 5 of the Taxation Laws (Amendment and Miscellaneous Provisions) Act, 1986 w.e.f. 01-04-1988 before it was read as, (iia) in the case of any new machinery or plant (other than ships and aircraft) which has been installed after the 31st day of March, 1980, but before the 1st day of April, 1985, a further sum equal to one-half of the amount admissible under clause (ii) (exclusive of extra allowance for double or multiple shift working of the machinery or plant and the extra allowance in respect of machinery or plant installed in any premises used as a hotel) in respect of the previous year in which such machinery or plant is installed or, if the machinery or plant is first put to use in the immediately succeeding previous year, then, in respect of that previous year : Provided that no deduction shall be allowed under this clause in respect of - (a) any machinery or plant installed in any office premisses or any residential accommodation; (b) any office appliances or road transport vehicles; and (c) any machinery or plant, the whole of the actual cost of which is allowed as a deduction (whether by way of depreciation or otherwise( in computing the income chargeable under the head Profits and gains of business or profession of any one previous year. Explanation : For the purposes of this clause, - (a) new machinery or plant shall have the meaning assigned to it in clause (2) of the Explanation below clause (vi) of this sub-section; (b) residential accommodation includes accommodation in the nature of a guest house but does not include premises used as a hotel; And was Inserted vide Section 14 of the Finance Act, 2002 w.e.f. 01-04-2003 And was Amended vide Section 8 of the Finance (No. 2) Act, 2004 w.e.f. 01-04-2005 19. Inserted vide Section 9 of the Finance (No. 2) Act, 1998 w.e.f. 01-04-1998 Earlier , Amended vide Section 6 of the Finance Act, 1966 w.e.f. 01-04-1966 And was Amended vide Section 8 of the Finance (No. 2) Act, 1967 w.e.f. 01-04-1967 And was Omitted vide Section 5 of the Taxation Laws (Amendment and Miscellaneous Provisions) Act, 1986 w.e.f. 01-04-1988 before it was read as, (iii) in the case of any building, machinery, plant or furniture which is sold, discarded, demolished or destroyed in the previous year (other than the previous year In which it is first brought Into use), the amount by which the moneys payable in respect of such building, machinery, plant or furniture, together with the amount of scrap value, if any, fall short of the written down value thereof: Provided that such deficiency is actually written off in the books of the assessee. Explanation. For the purposes of this clause, (1) moneys payable in respect of any building, machinery, plant or furniture includes- (a) any insurance, salvage or compensation moneys payable in respect thereof; (b) where the building, machinery, plant or furniture is sold, the price for which it is sold, so, however, that where the actual cost of a motor car is, in accordance with the proviso to clause (1) of section 43, taken to be twenty-five thousand rupees, the moneys payable in respect of such motor car shall be taken to be a sum which bears to the amount for which the motor car is sold or, as the case may be, the amount of any insurance, salvage or compensation moneys payable in respect thereof (including the amount of scrap value, if any) the same proportion as the amount of twenty-five thousand rupees bears to the actual cost of the motor car to the assessee as it would have been computed before applying the said proviso; (2) sold includes a transfer by way of exchange or a compulsory acquisition under any law for the time being in force but does not include a transfer, in a scheme of amalgamation, of any asset by the amalgamating company to the amalgamated company where the amalgamated company is an Indian company . 20. Substituted vide Section 8 of the Finance Act, 2005 w.e.f. 01-04-2005 before it was read as, an Indian company 21. Omitted vide Section 5 of the Taxation Laws (Amendment Miscellaneous Provisions) Act, 1986 w.e.f. 01-04-1988 before it was read as, (iv) in the case of any building which has been newly erected after the 31st day of March, 1961, where the building is used solely for the purpose of residence of persons employed in the business and the income of each such person chargeable under, the head Salaries is ten thousand rupees or less, or where the building is used solely or mainly for the welfare of such persons as a hospital, creche, school, canteen, library, recreational centre, shelter, rest-room or lunch-room, a sum equal to forty per cent. of the actual cost of the building to the assessee in respect of the previous year of erection of the building; Earlier , Amended vide Section 10 of the Finance Act, 1983 w.e.f. 01-04-1984 And was Amended vide Section 6 of the Finance Act, 1966 w.e.f. 01-04-1966 And was Amended vide Section 7 of the Finance Act, 1976 w.e.f. 01-04-1977 And was Amended vide Section 5 of the Finance Act, 1978 w.e.f. 01-04-1979 22. Omitted vide Section 5 of the Taxation Laws (Amendment Miscellaneous Provisions) Act, 1986 w.e.f. 01-04-1988 before it was read as, (v) in the case of any new building, the erection of which is completed after the 31st day of March, 1967, where the building is owned by an Indian company and used by such company as a hotel and such hotel is for the time being approved in this behalf by the Central Government, a sum equal to twenty-five per cent. of the actual cost of erection of the building to the assessee, in respect of the previous year in which the erection of the building is completed or, if such building is first brought into use as a hotel in the immediately succeeding previous year, then in respect of that previous year; Earlier , Inserted vide Third Schedule of the Finance (No. 2) Act, 1967 w.e.f. 01-04-1968 And was Amended vide Section 10 of the Finance Act, 1983 w.e.f. 01-04-1984 23. Omitted vide Section 5 of the Taxation Laws (Amendment Miscellaneous Provisions) Act, 1986 w.e.f. 01-04-1988 before it was read as, (vi) in the case of a new ship or a new aircraft acquired after the 31st day of May, 1974 by an assessee engaged in the business of operation of ships or aircraft or in the case of new machinery or plant (other than office appliances or road transport vehicles) installed after that date for the purposes of business of generation or distribution of electricity or any other form of power or of construction, manufacture or production of any one or more of the articles or things specified in items 1 to 24 (both inclusive) in the list in the Ninth Schedule or in the case of new machinery or plant (other than office appliances or road transport vehicles) installed after that date in a small-scale industrial undertaking for the purposes of business of manufacture or production of any other articles or things, a sum equal to twenty per cent. of the actual cost of the ship, aircraft, machinery or plant to the assessee, in respect of the previous year in which the ship or aircraft is acquired or the machinery or plant is installed, or if the ship, aircraft, machinery or plant is first put to use in the immediately succeeding previous year, then, in respect of that previous year; but any such sum shall not be deductible in determining the written down value for the purposes of clause (ii): Provided that the assessee may, before the expiry of the time allowed under sub-section (1) or sub-section (2) of section 139, whether fixed originally or on extension, for furnishing the return of income for the assessment year in respect of which he first becomes entitled to deduction under this clause, furnish to the Income-tax Officer a declaration in writing that the provisions of this clause shall not apply to him, and if he does so, the provisions of this clause shall not apply to him for that assessment year and for every subsequent assessment year; so, however, that the assessee may, by notice in writing furnished to the Income-tax Officer before the expiry of the time allowed under sub-section (1) or sub-section (2) of section 139, whether fixed originally or on extension, for furnishing the return of income for any such subsequent assessment year, revoke his declaration and upon such revocation, the provisions of this clause shall apply to the assessee for that subsequent assessment year and for every assessment year thereafter: Provided further that no deduction shall be allowed under this clause in respect of- (a) any machinery or plant installed in any office premises or any residential accommodation, including any accommodation in the nature of a guest-house, (b) any ship, aircraft, machinery or plant in respect of which the deduction by way of development rebate is allowable under section 33 and (c) any ship or aircraft acquired after the 1st day of March, 1976, or any machinery or plant installed after that date. Explanation .- For the purposes of this clause,- (1) new ship or new aircraft includes a ship or aircraft which before the date of acquisition by the assessee was used by any other person, if it was not at any time previous to the date of such acquisition owned by any person resident in India; (2) new machinery or plant includes machinery or plant which before its installation by the assessee was used outside India by any other person, if the following conditions are fulfilled, namely: - (a) such machinery or plant was not, at any time previous to the date of such installation by the assessee, used in India; (b) such machinery or plant is imported into India from any country outside India; and (c) no deduction on account of depreciation in respect of such machinery or plant has been allowed or is allowable under the provisions of the Indian Income- tax Act, 1922 (11 of 1922) or this Act in computing the total income of any person for any period prior to the date of the installation of the machinery or plant by the assessee; (3) an industrial undertaking shall be deemed to be a small-scale industrial undertaking, if the aggregate value of the machinery and plant installed, as on the last day of the previous year, for the purposes of the business of the undertaking does not exceed seven hundred and fifty thousand rupees; and for this purpose the value of any machinery or plant shall be,- (a) in the case of any machinery or plant owned by the assessee, the actual cost thereof to the assessee; and (b) in the case of any machinery or plant hired by the assessee, the actual cost thereof as in the case of the owner of such machinery or plant. Earlier , Inserted vide Section 3 of the Direct Taxes (Amendment) Act, 1974 w.e.f. 01-04-1975 And was Amended vide Section 7 of the Finance Act, 1976 w.e.f. 01-04-1976 24. Omitted vide Section 5 of the Taxation Laws (Amendment Miscellaneous Provisions) Act, 1986 w.e.f. 01-04-1988 before it was read as, (1A) Where the business or profession is carried on in a building not owned by the assessee but in respect of which the assessee holds a lease or other right of occupancy and any capital expenditure is incurred by the assessee for the purposes of the business or profession after the 31st day of March, 1970 on the construction of any structure or doing of any work in or in relation to, and by way of renovation or extension of, or improvement to, the building, then, in respect of depreciation of such structure or work, the following deductions shall, subject to the provisions of section 34, be allowed- (i) such percentage on the written down value of the structure or work as may in any case or class of cases be prescribed; (ii) in the case of any such structure or work which is sold, discarded, demolished, destroyed or is surrendered as a result of the determination of the lease or other right of occupancy in respect of the building in the previous year (other than the previous year in which it is constructed or done) the amount by which the moneys payable in respect of such structure or work together with the amount of scrap value, if any, fall short of the written down value thereof: Provided that such deficiency is actually written off in the books of the assessee. Explanation. For the purposes of this clause,- (i) moneys payable , in respect of any structure or work, includes (a) any insurance or compensation moneys payable in respect thereof; (b) where the structure or work is sold, the price for which it is sold; and (ii) sold shall have the meaning assigned to it in the Explanation to clause (iii) of sub-section (1). Earlier , Inserted vide Section 5 of the Taxation Laws (Amendment) Act, 1970 w.e.f. 01-04-1971. 25. Substituted vide Section 21 of the Finance Act, 2001 w.e.f. 01-04-2002 before it was read as, (2) Where in the assessment of the assessee full effect cannot be given to any allowance under clause (ii) of sub-section (1) in any previous year owing to there being no profits or gains chargeable for that previous year or owing to the profits or gains being less than the allowance, then, the allowance or the part of allowance to which effect has not been given (hereinafter referred to as unabsorbed depreciation allowance), as the case may be,- (i) shall be set off against the profits and gains, if any, of any business or profession carried on by him and assessable for that assessment year ; (ii) if the unabsorbed depreciation allowance cannot be wholly set off under clause (i), the amount not so set off shall be set off from the income under any other head, if any, assessable for that assessment year; (iii) if the unabsorbed depreciation allowance cannot be wholly set off under clause (i) and clause (ii), the amount of allowance not so set off shall be carried forward to the following assessment year and- (a) it shall be set off against the profits and gains, if any, of any business or profession carried on by him and assessable for that assessment year ; (b) if the unabsorbed depreciation allowance cannot be wholly so set off, the amount of unabsorbed depreciation allowance not so set off shall be carried forward to the following assessment year not being more than eight assessment years immediately succeeding the assessment year for which the aforesaid allowance was first computed : Provided that the time limit of eight assessment years specified in sub-clause (b) shall not apply in the case of a company for the assessment year beginning with the assessment year relevant to the previous year in which the said company has become a sick industrial company under sub-section (1) of section 17 of the Sick Industrial Companies (Special Provisions) Act, 1985 (1 of 1986) and ending with the assessment year relevant to the previous year in which the entire net worth of such company becomes equal to or exceeds the accumulated losses. Explanation .- For the purposes of this clause, net worth shall have the meaning assigned to it in clause (ga) of sub-section (1) of section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985 (1 of 1986). Earlier , Amended vide Section 5 of the Taxation Laws (Amendment Miscellaneous Provisions) Act, 1986 w.e.f. 01-04-1988 And was Amended vide Section 126 of the Direct Tax Laws (Amendment) Act, 1987 w.e.f. 01-04-1989 And was Amended vide Section 88 of the Finance Act, 1992 w.e.f. 01-04-1993 And was Amended vide Section 11 of the Finance (No. 2) Act, 1996 w.e.f. 01-04-1997 And was Amended vide Section 14 of the Finance Act, 2000 w.e.f. 01-04-2001 26. Substituted vide Section 11 of the Finance (No. 2) Act, 2009 w.e.f. 01-04-2010 before it was read as, the expressions assets and block of assets 27. Substituted vide Section 8 of the Finance Act, 2010 w.e.f. 01-04-2011 before it was read as, clause (xiii) and clause (xiv) 28. Inserted vide Section 7 of the Finance Act, 2012 w.e.f. 01-04-2013 29. Inserted vide Section 10 of the Finance Act, 2015 w.e.f. 01-04-2016 30. Inserted vide Section 10 of the Finance Act, 2015 w.e.f. 01-04-2016 31. Substituted vide Section 10 of the Finance Act, 2015 w.e.f. 01-04-2016 before it was read as, Provided 32. Inserted vide Section 10 of the Finance Act, 2015 w.e.f. 01-04-2016 33. Substituted vide Section 13 of the Finance Act, 2016 w.e.f. 01-04-2017 before it was read as, or in the business of generation or generation and distribution . 34. Inserted vide Section 8 of the Finance Act, 2021 w.e.f. 01-04-2021 35. Inserted vide Section 8 of the Finance Act, 2021 w.e.f. 01-04-2021