Section 33B of Income Tax Act for AY 2023-24

Updated notes on Rehabilitation allowance section 33B of Income Tax Act 1961 as amended by the Finance Act 2022 and Income-tax Rules, 1962.


Amended and updated notes on section 33B of Income Tax Act 1961 as amended by the Finance Act 2022 and Income-tax Rules, 1962. Detail discussion on provisions and rules related to rehabilitation allowance.

Chapter IV (Sections 14 to 59) of the Income Tax Act 1961 deals with the provisions related to computation of total income. Section 33B of IT Act 1961-2023 provides for reserves for rehabilitation allowance.

Recently, we have discussed in detail section 33AC (reserves for shipping business) of IT Act 1961. Today, we learn the provisions of section 33B of Income-tax Act 1961. The amended provision of section 33B is effective for financial year 2022-23 relevant to the assessment year 2023-24.

In this article, you will learn detail of the provisions of section 33B of the Income Tax Act, 1961 Bare Act read with the Income-tax Rules, 1962, regulations, notifications, circulars, orders and Press Release by CBDT, Income Tax Department and the Ministry of Law and Justice, Government of India.

Section-33B: Rehabilitation Allowance

Where the business of any industrial undertaking carried on in India is discontinued in any previous year by reason of extensive damage to, or destruction of, any building, machinery, plant or furniture owned by the assessee and used for the purposes of such business as a direct result of—

  • (i) flood, typhoon, hurricane, cyclone, earthquake or other convulsion of nature; or
  • (ii) riot or civil disturbance; or
  • (iii) accidental fire or explosion; or
  • (iv) action by an enemy or action taken in combating an enemy (whether with or without a declaration of war),

and, thereafter, at any time before the expiry of three years from the end of such previous year, the business is re-established, reconstructed or revived by the assessee, he shall, in respect of the previous year in which the business is so re-established, reconstructed or revived, be allowed a deduction of a sum by way of rehabilitation allowance equivalent to sixty per cent of the amount of the deduction allowable to him under clause (iii) of sub-section (1) of section 32 in respect of the building, machinery, plant or furniture so damaged or destroyed :

Provided that no deduction under this section shall be allowed in relation to the assessment year commencing on the 1st day of April, 1985, or any subsequent assessment year.

Explanation: In this section, “industrial undertaking” means any undertaking which is mainly engaged in the business of generation or distribution of electricity or any other form of power or in the construction of ships or in the manufacture or processing of goods or in mining.

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