Provisions for new assets put to use for less than 180 days vis a vis for a period of less than one hundred and eighty days.Difference seems unintended but is likely to create disputes.

ITA 2025

ITA 1961

Section 33

Section 32

Sub-section 4

Proviso to clauses. 32(1) and its clauses

(4) The deduction under this section shall be restricted to 50% of the prescribed rate, if such asset, being asset referred to in sub-sections (2) and (3) is--

(a) acquired by the assessee during the tax year; and

(b) put to use for the purposes of business or profession for less than one hundred and eighty days in that tax year.

8[Provided further that where an asset referred to in clause (i) or clause (ii) 9[or clause (iia)], 29[or the first proviso to clause (iia)] as the case may be, is acquired by the assessee during the previous year and is put to use for the purposes of business or profession for a period of less than one hundred and eighty days in that previous year, the deduction under this sub-section in respect of such asset shall be restricted to fifty per cent of the amount calculated at the percentage prescribed for an asset under clause (i) or clause (ii) 10[or clause (iia)], as the case may be:]

The provisions has drafting differences due to clauses and style of drafting.

In substances, intent and effect the provision can be regarded similar . However, there is vital differences as discussed below:

Differences in language:

put to use for the purposes of business or profession for less than one hundred and eighty days in that tax year.

put to use for the purposes of business or profession for a period of less than one hundred and eighty days in that previous year

Observations of learned author distinct words are used :

for less than one hundred and eighty days

for a period of less than one hundred and eighty days

The words used can be considered to mean actual number of days on which asset was actually put to use during the previous year. So even if asset was acquired say on first April of tax year - actual number of days on which asset was put to actual work need to be ascertained, if a strict interpretation rule is applied. Therefore, if actual number of working days for any asset is less than 180 days, then it will be considered as entitled for half of depreciation allowable.

The above expression has been accepted to mean a period of 180 days and not actual number of working days for any asset. Therefore, there is no dispute and it is accepted position that if an asset was acquired before 30th September of PY, and issued for use then it was eligible for full year depreciation.

It is likely that different tax officers will interpret the provision of ITA 2025 differently and disputes are likely to take place.

A clarification is desired.