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Home Acts & Rules Bill Bills FINANCE BILL, 2020 Chapters List Chapter III DIRECT TAXES - Income-tax This
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Clause 20 - Amendment of section 35E. - FINANCE BILL, 2020

FINANCE BILL, 2020
Chapter III
DIRECT TAXES - Income-tax
  • Contents
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Amendment of section 35E.

20. In section 35E of the Income-tax Act, in sub-section (6), for the words “and the assessee furnishes, along with his return of income for the first year in which the deduction under this section is claimed, the report of such audit”, the words, figures and letters “before the specified date refered to in section 44AB and the assessee furnishes for the first year in which the deduction under this section is claimed, the report of such audit by that date” shall be substituted.

 



 

Notes on Clauses:

Clause 20 of the Bill seeks to amend section 35E of the Income-tax Act relating to deduction for expenditure on prospecting, etc., for certain minerals.

Sub-section (1) of the said section provides that where an assessee, being an Indian company or a person other than a company who is a resident in India and is engaged in any operations relating to prospecting for, or extraction or production of, any mineral and incurs, after the 31st day of March, 1970, any expenditure specified in sub-section (2), the assessee shall, in accordance with and subject to the provisions of this section, be allowed for each one of the relevant previous years a deduction of an amount equal to one-tenth of the amount of such expenditure.

Sub-section (6) of the said section provides that where the assessee is a person other than a company or a co-operative society, no deduction shall be admissible under sub-section (1) unless the accounts of the assessee for the year or years in which the expenditure specified in sub-section (2) is incurred have been audited by an accountant as defined in the Explanation below sub-section (2) of section 288 and the assessee furnishes, along with his return of income for the first year in which the deduction under this section is claimed, the report of such audit in the prescribed form duly signed and verified by such accountant and setting forth such particulars as may be prescribed.

It is proposed to amend the said sub-section (6) so as to provide that deduction under sub-section (1) of section 35E shall not be admissible to assessee unless the accounts of the assessee for the year or years in which the expenditure specified in sub-section (2) is incurred have been audited by an accountant as defined in the Explanation below sub-section (2) of section 288 before the specified date referred to section 44AB (i.e., one month prior to the due date for filing of return under sub-section (1) of section 139) and the report of such audit has been furnished by that date.

This amendment will take effect from 1st April, 2020 and will, accordingly, apply in relation to the assessment year 2020-2021 and subsequent assessment years.

 
 
 
 
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