Income Tax Act, 2025
Section 1: Subs. by Act 12 of 1990, s. 9, for the proviso (w.e.f. 11990).
1. Subs. by Act 12 of 1990, s. 9, for the proviso (w.e.f. 11990).
2. Subs. by Act 13 of 1966, s. 8, for “the third succeeding previous year next following the previous year in which the land
has been prepared” (w.e.f. 11966).
3. Subs. by Act 20 of 1967, s. 33 and the third Schedule, for “(the total income for this purpose being computed after
making the allowance under sub-section (1) or sub-section (1A) or clause (ii) of sub-section (2) of section 33 but without
making any allowance under sub-section (1) of this section” (w.e.f. 11968).
4. The words, figures and letter “or section 280-O” omitted by Act 26 of 1988, s. 54 (w.e.f. 11988).
5. Subs. by Act 13 of 1966, s. 8, for “calculated at the rates specified in sub-section (1)” (w.e.f. 11966).
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(ii) where an allowance has to be made under clause (ii) of sub-section (2) of this section in
respect of amounts carried forward from more than one assessment year, the amount carried
forward from an earlier assessment year shall be allowed before any amount carried forward from
a later assessment year.
(3) The deduction under sub-section (1) shall be allowed only if the following conditions are
fulfilled, namely:—
(i) the particulars prescribed in this behalf have been furnished by the assessee;
(ii) an amount equal to seventy-five per cent. of the development allowance to be actually
allowed is debited to the profit and loss account of the relevant previous year and credited to a reserve
account to be utilised by the assessee during a period of eight years next following for the purposes of
the business of the undertaking, other than—
(a) for distribution by way of dividends or profits; or
(b) for remittance outside India as profits or for the creation of any asset outside India; and
(iii) such other conditions as may be prescribed.
(4) If any such land is sold or otherwise transferred by the assessee to any person at any time before
the expiry of eight years from the end of the previous year in which the deduction under sub-section (1)
was allowed, any allowance under this section shall be deemed to have been wrongly made for the
purposes of this Act, and the provisions of sub-section (5A) of section 155 shall apply accordingly:
Provided that this sub-section shall not apply—
(i) where the land is sold or otherwise transferred by the assessee to the Government, a local
authority, a corporation established by a Central, State or Provincial Act, or a Government
company as defined in section 617 of the Companies Act, 1956 (1 of 1956); or
(ii) where the sale or transfer of the land is made in connection with the amalgamation or
succession referred to in sub-section (5) or sub-section (6).
1[(5) Where, in a scheme of amalgamation, the amalgamating company sells or otherwise transfers to
the amalgamated company any land in respect of which development allowance has been allowed to the
amalgamating company under sub-section (1),—
(a) the amalgamated company shall continue to fulfil the conditions mentioned in sub-section (3)
in respect of the reserve created by the amalgamating company and in respect of the period within
which such land shall not be sold or otherwise transferred and in default of any of these conditions,
the provisions of sub-section (5A) of section 155 shall apply to the amalgamated company as they
would have applied to the amalgamating company had it committed the default; and
(b) the balance of development allowance, if any, still outstanding to the amalgamating company
in respect of such land shall be allowed to the amalgamated company in accordance with the
provisions of sub-section (2), so, however, that the total period for which the balance of development
allowance shall be carried forward in the assessments of the amalgamating company and the
amalgamated company shall not exceed the period of eight years specified in sub-section (2) and the
amalgamated company shall be treated as the assessee in respect of such land for the purposes of this
section.
or sub-section
or clause
of sub-section
of section 33 but without
making any allowance under sub-section
of this section” (w.e.f. 11968).
4. The words, figures and letter “or section 280-O” omitted by Act 26 of 1988, s. 54 (w.e.f. 11988).
5. Subs. by Act 13 of 1966, s. 8, for “calculated at the rates specified in sub-section
where an allowance has to be made under clause
of sub-section
of this section in
respect of amounts carried forward from more than one assessment year, the amount carried
forward from an earlier assessment year shall be allowed before any amount carried forward from
a later assessment year.
The deduction under sub-section
shall be allowed only if the following conditions are
fulfilled, namely:—
the particulars prescribed in this behalf have been furnished by the assessee;
an amount equal to seventy-five per cent. of the development allowance to be actually
allowed is debited to the profit and loss account of the relevant previous year and credited to a reserve
account to be utilised by the assessee during a period of eight years next following for the purposes of
the business of the undertaking, other than—
for distribution by way of dividends or profits; or
for remittance outside India as profits or for the creation of any asset outside India; and
such other conditions as may be prescribed.
If any such land is sold or otherwise transferred by the assessee to any person at any time before
the expiry of eight years from the end of the previous year in which the deduction under sub-section
was allowed, any allowance under this section shall be deemed to have been wrongly made for the
purposes of this Act, and the provisions of sub-section
of section 155 shall apply accordingly:
Provided that this sub-section shall not apply—
where the land is sold or otherwise transferred by the assessee to the Government, a local
authority, a corporation established by a Central, State or Provincial Act, or a Government
company as defined in section 617 of the Companies Act, 1956 (1 of 1956); or
where the sale or transfer of the land is made in connection with the amalgamation or
succession referred to in sub-section
or sub-section
Where, in a scheme of amalgamation, the amalgamating company sells or otherwise transfers to
the amalgamated company any land in respect of which development allowance has been allowed to the
amalgamating company under sub-section
the amalgamated company shall continue to fulfil the conditions mentioned in sub-section
in respect of the reserve created by the amalgamating company and in respect of the period within
which such land shall not be sold or otherwise transferred and in default of any of these conditions,
the provisions of sub-section
of section 155 shall apply to the amalgamated company as they
would have applied to the amalgamating company had it committed the default; and
the balance of development allowance, if any, still outstanding to the amalgamating company
in respect of such land shall be allowed to the amalgamated company in accordance with the
provisions of sub-section
and the
amalgamated company shall be treated as the assessee in respect of such land for the purposes of this
section.