TaxTMI 
TaxTMI 
Deduction in respect of expenditure of distribution rights of feature films - (New) Rule 273 / (Old) Rule 9B
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....ble - the profits and gains of the business of production of feature films carried on by a person Meaning of "Cost of Production" in relation to a feature film "cost of acquisition" means the amount paid by the film distributor to the film producer or to another distributor under an agreement entered into by the film distributor with such film producer or such other distributor, as the case may be, for acquiring the rights of exhibition and, where the rights of exhibition have been acquired on a minimum guarantee basis, the minimum amount guaranteed, not being- (i) the amount of expenditure incurred by the film distributor for the preparation of the positive prints of the film; and (ii)....
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....distributor in any tax year and in such tax year, the film distributor- • (a) himself exhibits the film on a commercial basis in all or some of the areas; or • (b) sells the rights of exhibition of the film in respect of some of the areas; or • (c) himself exhibits the film on a commercial basis in certain areas and sells the rights of exhibition of the film in respect of all or some of the remaining areas, • AND the film is not released for exhibition on a commercial basis at least ninety days before the end of such tax year, Restriction on Deduction • the cost of acquisition of the film, in so far as it does not exceed- • (i) the amount realised by the film d....
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....ture film on a commercial basis; or • (ii) has sold the rights of exhibition of the feature film; or • (iii) has himself exhibited the feature film on a commercial basis in some areas and has sold the rights of exhibition of the feature film in respect of all or some of the remaining areas, • the amount realised by exhibiting the film, or the amount for which the rights of exhibition have been sold or, as the case may be, the aggregate of such amounts, is credited in the books of account maintained by him in respect of the year in which the deduction is admissible; and • Clause (b): Minimum Guarantee Transactions • in a case, where the film distributor has transferred the....
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....ation toa a Feature Film "Cost of acquisition" means the amount paid by the film distributor to the film producer or to another distributor under an agreement entered into by the film distributor with such film producer or such other distributor, as the case may be for acquiring the rights of exhibition and, where the rights of exhibition have been acquired on a minimum guarantee basis, the minimum amount guaranteed, not being- (i) the amount of expenditure incurred by the film distributor for the preparation of the positive prints of the film; and (ii) the expenditure incurred by him in connection with the advertisement of the film. Deduct....
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.... film distributor- (a) himself exhibits the film on a commercial basis in all or some of the areas; or (b) sells the rights of exhibition of the film in respect of some of the areas; or (c) himself exhibits the film on a commercial basis in certain areas and sells the rights of exhibition of the film in respect of all or some of the remaining areas, and the film is not released for exhibition on a commercial basis at least ninety days before the end of such previous year, the cost of acquisition of the film in so far as it does not exceed the amount realised by the film distributor by exhibiting the film on a commerc....
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....sis in some areas and has sold the rights of exhibition of the feature film in respect of all or some of the remaining areas, the amount realised by exhibiting the film, or the amount for which the rights of exhibition have been sold, or, as the case may be, the aggregate of such amounts, is credited in the books of account maintained by him in respect of the year in which the deduction is admissible ; (b) in a case where the film distributor has transferred the rights of exhibition of the feature film on a minimum guarantee basis, the minimum amount guaranteed and the amount, if any, received or due in excess of the guaranteed amount, or where the film distributor follows cash system of accounting, the amount receiv....