32 AC ?

Section 32AC provides a tax incentive by way of investment allowance to encourage huge investment in plant or machinery.

This attracts the attention of businessman in respect of investment in new plant and machinery. The deduction under section 32 AC is investment linked. The benefit of this section is available only to a company and not to any other assessee.

Where a company is engaged in the business of manufacture or production of any article or thing, acquires and installs new asset and the aggregate amount of actual cost of such new assets exceeds one hundred crore rupees, then, there shall be allowed a deduction.

The deduction is as follows

a)for the assessment year 2014–15, a sum equal to fifteen per cent of the actual cost of new assets acquired and installed in the Financial year 2013–14, if the aggregate amount of actual cost of such new assets exceeds one hundred crore rupees; and

b)for the assessment year 2015–16, a sum equal to fifteen per cent of the actual cost of new assets acquired and installed in the Financial Years 2013–14 and 2014–15,as reduced by the amount of deduction allowed, if any, under clause (a).

No deduction under sub-section (1A) shall be allowed for any assessment year commencing on or after the 1st day of April, 2018.

For the section: refer attachment.