Section 35AC of the Income Tax Act 1961, inter alia provides for a deduction in computing the business income of an assessee, of the amount paid by him to a Public Sector company or a local authority or to an association or institution approved by the National Committee for carrying-out any eligible project or scheme.

Section 35AC of the Income Tax Act, as amended by the Finance Act, 2016, provides that no deduction under this Section shall be allowed in respect of any assessment year commencing on or after 1st April, 2018. Accordingly, the benefit of deduction under Section 35AC of the I.T. Act is available only up to previous year ending 31-03-2017 (Assessment Year 2017-18) in respect of the payments made to association or institution already approved by the National Committee for carrying-out any eligible project or scheme.

In view of the above, it may be noted that requests received after 31st December, 2016 for the grant/modification/extension of approval beyond 31st March,2017 under Section 35AC of the Income-Tax Act shall not be considered/entertained by the National Committee.

Deduction under Section 35AC restricted; approvals for eligible projects beyond the statutory cut-off will not be considered. Section 35AC allowed a business-income deduction for payments to a public sector company, local authority, or association/institution approved by the National Committee for eligible projects. The Finance Act, 2016 removed the deduction for assessment years commencing on or after 1 April 2018. Accordingly, the deduction is available only for payments to associations or institutions already approved for periods up to the previous year ending 31 March 2017, and requests received after 31 December 2016 for approvals or extensions beyond 31 March 2017 will not be considered.