Under section 35D, Indian companies, resident in India, would be entitled to amortization of certain preliminary expenses incurred by them subject to the following limits:

CS Executive · Tax Laws and Practice · PYQS · December 2021
Under section 35D, Indian companies, resident in India, would be entitled to amortization of certain preliminary expenses incurred by them subject to the following limits:
(A) The deduction under section 35D is subject to maximum of ₹5,00,000
(B) The deduction under section 35D is maximum 5% of capital employed
(C) The deduction under section 35D is maximum 10% of cost of project.
(D) The deduction under section 35D is 1/5th of total preliminary expenses

Answer & Explanation:

Correct Answer: Option (B)

Official answer key: (B).

Topics: Income Tax Act, 1961

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