Repairs, Rent & Insurance of Furniture and Plant & Machinery - Section 31

Repairs deduction allows revenue repairs and insurance for business plant, while major replacements must be capitalised and depreciated.

Deductions are permitted for revenue expenditure on repairs and insurance premiums for furniture and plant and machinery used in business; capital expenditure on substantial replacements must be added to asset cost and depreciated rather than claimed as a revenue deduction. Routine replacement of consumable parts such as dies and moulds is generally allowable as revenue expense, while replacements of independently functioning, long-lived components with identifiable costs are capitalized. Abortive project expenses that do not create a new intangible asset may be treated as revenue expenditure.