Income-tax Act, 2025

Amortisation of certain preliminary expenses - Section 44

Amortisation of certain preliminary expenses.

44. (1) If an assessee, being an Indian company or a person (other than a company), who is resident in India, incurs any expenditure specified in sub-section (2)

(a) before the commencement of its business; or

(b) after the commencement of its business, in connection with the extension of its undertaking or in connection with its setting up a new unit,

the assessee shall be allowed a deduction of an amount equal to one-fifth of such expenditure for each of the five successive tax years beginning with

(i) the tax year in which the business commences, for clause (a); or

(ii) the tax year in which the extension of the undertaking is completed or the new unit commences production or operation, for clause (b).

(2) The expenditure referred to in sub-section (1) shall be

(a) the expenditure in connection with

(i) preparation of feasibility report;

(ii) preparation of project report;

(iii) conducting market survey or any other survey necessary for the business;

(iv) engineering services relating to the business;

(b) legal charges for drafting any agreement between the assessee and any other person for any purpose relating to the setting up or conduct of the business;

(c) in addition to expenditure in clauses (a) and (b), if the assessee is a company,

(i) legal charges for drafting and printing of the Memorandum and Articles of Association of the company;

(ii) fees for registering the company under the provisions of the Companies Act, 2013 (18 of 2013);

(iii) expenditure in connection with the issue, for public subscription, of shares in or debentures of the company, being underwriting commission, brokerage and charges for drafting, typing, printing and advertisement of the prospectus; and

(d) such other items of expenditure (not being expenditure eligible for any allowa .... To read the full section download the app from Google Play store