Amortisation of Expenditure for Prospecting Certain Minerals: Clause 51 of the Income Tax Bill, 2025 vs. Section 35E of the Income Tax Act, 1961

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..... ause 51 of the Income Tax Bill, 2025, introduces provisions for the amortisation of expenditure incurred in prospecting for certain minerals. This clause is significant in the context of taxation as it aims to provide a structured deduction mechanism for businesses engaged in mineral prospecting and extraction activities. The clause is designed to incentivize the exploration and development of min .....

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..... ecifying the types of expenditures eligible for amortisation and the conditions under which deductions can be claimed. Historically, similar provisions have been in place u/s 35E of the Income Tax Act, 1961. The new clause aims to refine these provisions to better align with contemporary industry practices and economic policies. Detailed Analysis Key Provisions of Clause 51 Clause 51 outlines .....

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..... d to subsequent years, but not beyond the tenth year from the start of commercial production. * Audit Requirement: For non-corporate entities, accounts must be audited, and audit reports submitted to claim deductions. * Transfer of Undertakings: In cases of amalgamation or demerger, deductions continue for the resulting company, but not for the transferring company in the year of transfer. * .....

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..... provisions, ensuring accountability and compliance. * Transfer Provisions: Clause 51 explicitly addresses both amalgamation and demerger scenarios, whereas Section 35E was amended over time to include demergers. * Terminology and Structure: Clause 51 uses updated terminology and a more structured format, reflecting modern legislative drafting practices. Practical Implications Clause 51 has .....

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