Actual cost definition narrows taxable basis for assets, limiting recoverable cost and adjusting for non-banking payments. Actual cost is the assessee's acquisition cost reduced by any portion paid by others. Motor vehicles used otherwise than on hire are subject to an upper cost cap for actual cost purposes, and cash payments above a prescribed threshold for acquisition are ignored when determining actual cost. For assets covered by the business-income clause, actual cost equals the fair market value taken into account. Assets for which section 35AD deductions are allowed, or acquired by distribution, liquidation, gift, will or irrevocable trust, are treated as having nil actual cost; if such an asset is later deemed income, actual cost is reduced by depreciation at the rate applicable from acquisition.