Amended and updated notes on section 35DD 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 amortisation of expenditure in case of amalgamation or demerger.
Chapter IV (Sections 14 to 59) of the Income Tax Act 1961 deals with the provisions related to computation of total income. Section 35DD of IT Act 1961-2023 provides for amortisation of expenditure in case of amalgamation or demerger.
Recently, we have discussed in detail section 35D (amortization of certain preliminary expenses) of IT Act 1961. Today, we learn the provisions of section 35DD of Income-tax Act 1961. The amended provision of section 35DD 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 35DD 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-35DD: Amortisation of expenditure in case of amalgamation or demerger
Section 35DD(1) of Income Tax Act
Where an assessee, being an Indian company, incurs any expenditure, on or after the 1st day of April, 1999, wholly and exclusively for the purposes of amalgamation or demerger of an undertaking, the assessee shall be allowed a deduction of an amount equal to one-fifth of such expenditure for each of the five successive previous years beginning with the previous year in which the amalgamation or demerger takes place.
Section 35DD(2) of Income Tax Act
No deduction shall be allowed in respect of the expenditure mentioned in sub-section (1) under any other provision of this Act.