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of <h1>Tea Companies' Investment Allowance u/s 32A: Reserve Must Be 75% of Allowed Amount.</h1> The circular addresses the investment allowance under section 32A of the Income-tax Act, 1961, specifically for tea companies. It clarifies that for tea companies, which are taxed on 40% of their income, the reserve required for claiming the investment allowance should be 75% of the investment allowance actually allowed. This is similar to the previous guidance on development rebates. The allowance applies to new machinery and plant installations, with the reserve being debited to the profit and loss account and credited to a reserve account. The circular instructs tax officers to note this clarification.
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