Deduction in respect of expenditure on production of feature in case of a films producer/distributer - Rule 9A - Income Tax - Ready Reckoner - Income Tax

Deduction in respect of expenditure on production of feature in case of a films producer/distributer ( Rule 9A ) The cost of production of a feature film shall be reduced by the subsidy received by the film producer under any scheme framed by the government where such amount of subsidy has not been included in computing the total income of the assessee for any assessment year. Conversely, the amount received by the producer of regional feature films which has not been charged to tax, shall be reduced from the cost of production of the film for the purpose of Rule 9A . Notes: Cost of production , as defined in rule 9A of Rules in relation to a feature film, means the expenditure incurred on the production of the film, not being- The expenditure incurred for the preparation of the positive prints of the film; and The expenditure incurred in connection with the advertisement of the film after it is certified for release by the Board of Film Censors. Conditions to be satisfied to claim deduction. The film is exhibited on a commercial basis by the producer(s) in some or all areas, The producer(s) sells the rights of exhibition in some or all areas; or The producer(s) does both, and the film is released for exhibition on a commercial basis 90 days before the end of such previous year. In case the film is not released for exhibition on a commercial basis 90 days before the end of the previous year, the cost of production will be allowed as deduction while computing the profits and gains of the previous year as long as such cost does not exceed the amount realized by the film producer(s) by exhibiting the film or selling the right to exhibit the film on a commercial basis. In case there is any balance, it will be carried forward to the next previous year as deduction in that year.