Investment deduction in backward areas grants a tax deduction for new plant and machinery with recapture on early transfer. A deduction equal to fifteen per cent of the actual cost of a qualifying new plant or machinery is allowable in the assessment year in which the asset is installed for undertakings set up in specified backward areas of Andhra Pradesh, Bihar, Telangana or West Bengal within the notified installation window, subject to location, timing and asset-type conditions. If the asset is sold or otherwise transferred within five years of installation, the amount of the deduction is included as income of the previous year in which the transfer occurs, with special application of this rule on specified amalgamation, demerger or reorganisation transfers to the successor.