Investment Allowance - Section 32AC

Investment allowance under Section 32AC allows companies deduction for significant new plant and machinery investments, subject to lock in and exclusions.

Investment allowance under Section 32AC permits companies engaged in manufacture or production to claim an additional deduction-calculated as a specified percentage of actual cost-on new plant and machinery acquired and installed in prescribed periods, subject to distinct threshold-based schemes, reduction where earlier allowance was claimed, a five-year lock-in that triggers deemed income on premature disposal (with amalgamation/demerger exceptions), and specific exclusions such as ships, aircraft, second-hand plant, office installations, office appliances and vehicles; the allowance is over and above depreciation and does not reduce block WDV.