Section 35AD: 100% Deduction for Capital Expenditure in Specified Businesses, Including Conditions and Restrictions on Machinery and Payments.
Section 35AD of the Income Tax Act allows a 100% deduction of capital expenditure for specified businesses, including cold chain facilities, warehousing for agricultural produce, and hospitals with at least 100 beds, among others. Certain businesses, like cross-country natural gas pipelines, require approval from relevant authorities. Capital expenditure deductions were reduced to 100% from 150% effective April 1, 2018. Expenditures incurred before business commencement can also be deducted if capitalized. Restrictions include conditions on plant and machinery and disallowance of deductions if payments exceed specified cash limits. Losses from specified businesses can only be offset against profits from similar businesses.