1. Applicability: All assesses who carry on the business of growing and manufacturing tea or coffee or rubber in India.
2. Pre-condition: The assessee should deposit the amount in NABARD or special Deposit Account within earlier of 6months from the end of the relevant previous year or before the due date of filing return of his Income with the previous approval of Central Govt.
3. Amount of deduction: Least if the following is deductible – Amount deposited in a deposit account framed by Tea Board or Coffee Board or Rubber Board. 40% of current year profits or gains of business or profession.
4. No deduction for partner or member : Deduction u/s 33AB shall not be allowed in computation of income of a partner of a firm or a member of AOP or BOI, if deduction is claimed under this section by the firm or AOP or BOI.
5. Audit Report: The accounts should be audited by a Chartered Accountant and certificate in Form 3AC should be filed along with the return of income. If the accounts are already audited under any other law, then a report in Form 3AC is sufficient.
6. Utilization of Deposit: The amount kept in deposit will be allowed to be withdrawn to be utilized for-
- Purpose of business other than for declaration of dividend or distribution of profits, or
- Purchase of eligible assets as per the scheme.
However, such expenditure will not be allowed as deduction in computation of income under the head “profits and Gains of Business or Profession”.
7. Taxability on closure of deposits:
When the amount can be withdrawn and it is treated as taxable profit. When the amount can be withdrawn and it is not treated as income.
1. Closure of Business.
2. Dissolution of Firm.
1. Death of a taxpayer.
2. Partition of Hindu undivided family.
3. Liquidation of a company.
8. Ineligible Assets: The deposit should not be utilized for the purpose of acquisition of the following ineligible assets-
- Plant and machinery installed in office or residential accommodation or guesthouse.
- Office appliances other than computer.
- Plant and machinery entitled for 100% deduction.
- Plant and machinery installed in an industrial undertaking manufacturing any article specified in Eleventh schedule.
9. Withdrawal of exemption: The deduction allowed under this section shall be withdrawn if the asset acquired out of the money Withdrawn from the special account is sold or otherwise Transferred.
