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madhu sharma (Querist)
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06 March 2013 A company investing Rs 100 crore or more in plant and machinery in April 1, 2013 to March 31, 2015 will be allowed 15 per cent investment deduction allowance apart from depreciation.-Kindly explain it in details.

CA Priyank Singhi

CA Priyank Singhi (Expert)
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06 March 2013 If a manufacturing co makes fresh investment in Plant & Machinery (i.e., the P&M should be ready to use) of Rs 100 crore or more, the company can claim a deduction of 15% over and above the depreciation rates. For ex. if you make an investment of Rs 150 crores in FY 13-14, the co. can claim a deduction of Rs 22.5 crores (150 * 15%)over and above the normal depreciation that you are entitled to.

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CA Priyank Singhi

CA Priyank Singhi (Expert)
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06 March 2013 And in FY 14-15 also you make an investment of Rs 200 crores for ex. You will again be entitled to a deduction of Rs 30 crores (200*15%).
However, if you invest Rs 80 crores in FY 13-14 and 70 crores in FY 14-15, you will be able to claim a deduction of Rs 22.5 {(70+80)*15%}crores only in FY 14-15 because only in FY 14-15 has your investment crossed 100 crores.

madhu sharma

madhu sharma (Querist)
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06 March 2013 In which form this deduction will be. Does the company need to club that additional deduction amount along with the normal depreciation or in any other manner?

CA Priyank Singhi

CA Priyank Singhi (Expert)
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06 March 2013 The additional deduction would be allowed U/S 32AC of the Income Tax Act.

madhu sharma

madhu sharma (Querist)
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06 March 2013 thank you so much sir.

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