Direct tax

DIRECT TAX

 Measures to Phase Out Deductions :-

It proposed to phase out the following deductions available in the Income-tax Act:-

(1) Depreciation. It is proposed to amend Rule 5 of Income-tax Rules, 1962 to restrict the
highest rate of depreciation under the Income-tax Act to 40% for all the
assets (whether old or new) falling in the relevant block of assets with
effect from 01.4.2017

(2) Section 35AD of the Income-tax Act: Investment linked deduction for
specified business.
It is proposed to amend section 35AD of the Income-tax Act so as to reduce
the deduction from 150% to 100% in the case of a cold-chain facility,
warehousing facility for storage of agricultural produce, an affordable
housing project, production of fertilizer and building and operating
hospitals with effect from 01.04.2017.

(3) Section 35CCC of the Income-tax Act: Deduction for expenditure on
agricultural extensions project.
It is proposed to amend section 35CCC of the Income-tax Act to restrict the
deduction to 100% from financial year 2017-18 (Assessment Year 2018-
19).

(4) Section 35 CCD of the Income-tax Act: Deduction for expenditure on skill
development project.
It is proposed to amend section 35CCD of the Income-tax Act so as to
provide that the weighted deduction of 150% shall be available upto
financial year 2019-20 (assessment year 2020-21). However, the
deduction under the said section shall be restricted to 100% from financial
year 2020-21 (Assessment Year 2021-22).