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  SPECIAL DEDUCTIONS UNDER SECTIONS 35 TO 35E OF THE INCOME-TAX ACT, 1961 Section Nature of expenditure Quantum of deduction Qualifying Assessee Other provisions 35(1)(i) Scientific Research  Any expenditure (not being capital in nature) laid out or expended for scientific research related to assessee's business The amount actually incurred All assessees Where any expenditure is laid out or spent before the commencement of business on payment of salaries to an employee engaged in such scientific research or on purchase of materials used in such research, the aggregate of such expenses so incurred within three preceding previous years shall, to the extent certified by prescribed authority (Refer Rule 6) shall be deemed to have been expended in the year in which actual business is commenced. 35(1)(ii) Scientific Research  Payment to a notified/approved research association/university/college or other institution to be used for scientific research 100% of the sum paid (w.e.f...

  DEPRECIATION UNDER INCOME-TAX ACT WHAT IS DEPRECIATION? As per law of lexicon depreciation is defined as positive decline in the real value of a tangible asset because of consumption, wear and tear or obsolescence. In accountancy, depreciation refers to two aspects of the same concepts: The decrease in value of assets; The allocation of cost of assets over a period in which the assets are used. In Income Tax, depreciation is a charge against the income. It is an allowance on capital assets acquired and put to use. There are different methods of calculating the depreciation like straight-line method or written down value (WDV) method. The Income-tax Act, 1961 (‘the Act’) recognizes WDV method, save and except for undertaking engaged in generation or generation and distribution of power. BLOCK OF ASSETS [SECTION 2(11)] Prior to the 1986, the Income-tax Act allowed the calculation of depreciation in respect of each capital asset separately. The computation of depreciation allowance ...