Clause 51 - Amortisation of expenditure for prospecting certain minerals.

Amortisation of prospecting expenditure permits staged tax deductions for mineral exploration, subject to exclusions, carryforward and audit conditions.

An Indian company or resident person (other than a company) engaged in prospecting, extraction or production of specified minerals may deduct one tenth of qualifying prospecting and development expenditure in each relevant tax year; qualifying expenditure is that incurred in the year of commercial production and up to four preceding years, reduced by amounts met by others and by sale, salvage, compensation or insurance receipts, with exclusions for site/deposit acquisitions and depreciable capital assets. Unallowed instalments may be carried forward up to ten years. Non company claimants require audited accounts and an audit report; deductions do not survive as claims elsewhere in the Act and continue with successor companies on amalgamation or demerger.