Businesses in Petroleum Sector Can Deduct 20% Profits Under Section 33ABA; Conditions Apply for Eligible Deposits and Use.

Section 33ABA of the Income Tax Act allows deductions for businesses involved in petroleum or natural gas extraction in India, under agreements with the Central Government. Deposits must be made by the end of the fiscal year into an approved SBI scheme or a Site Restoration Account. The deductible amount is the lesser of the deposited amount or 20% of the business's current year profit. Deductions are not allowed for partners or members if claimed by the firm. Deposits can only be used for business purposes or purchasing eligible assets, excluding certain ineligible assets. Withdrawals not used as per the scheme are taxable. An audit by a certified accountant is required to claim deductions.