33 AB Deposit

[P S SATYA NARAYANA]

Kindly clarify - whether excess amount drawn from the Development Account (Sec 33AB) can be carried forward to  subsequent year, within the scheme peirod of 4 years. 

That is to say >>>>  In the year of excess amount drawn >>  offer it to  tax and subsequent year claim it back on actual spent, since the amount spent is within the Scheme period.

[CAGOPALJI AGRAWAL]

But the maximum amount is lower of two:

1. A sum deposited in the special account 

2. 40% of the business profit

Which ever is lower.

AI Summary

Deduction limit under the deposit scheme: deduction confined to the lower of special account deposit or proportionate business profit. The allowable deduction for deposits to the special Development Account is limited to the lower of: (a) the sum deposited in the special account; and (b) a prescribed proportion of business profit. This limiting rule determines entitlement to the deduction and thereby affects whether any excess drawn can be treated for tax purposes.