Amortisation of certain Preliminary Expenses - Section 35D

Amortisation of Preliminary Expenses allowed in fixed annual instalments over prescribed successive years under Section 35D.

Section 35D allows an Indian company or resident non corporate assessee to deduct specified preliminary expenses by way of annual instalments over prescribed successive years from the year the business, extension or new unit commences; qualifying expenditure is limited by percentages of project cost or, for companies, by reference to capital employed, with excess disregarded. Eligible categories include feasibility and project reports, surveys, engineering services, incorporation and certain public issue costs. Deductions claimed under this section cannot be claimed elsewhere; Form 3AF and audited Form 3AE filings are required in prescribed cases, and unamortised amounts on amalgamation or demerger vest in the successor entity.