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  • Sanskar Garg

Sec 33 of Income Tax Act, 1961: Development rebate

Updated: Oct 4, 2022

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The development rebate is in respect of a new ship or new machinery or plant (other than office appliances or road transport vehicles) which is owned by the assessee. There shall be allowed a deduction for the previous year in which the ship or machinery was acquired or installed, in accordance with and subject to the provisions of this section and of section 34. The development rebate shall be computed in accordance with the provisions of sub-section (2) as if it were a ship or machinery and as if, for all purposes of that sub-section, the profit or loss on such ship or machinery were a separate business conducted by the assessee.

Section 33(2) defines that In the case of a ship acquired or machinery or plant installed after the 31st day of December, 1957, where the total income of the assessee assessable for the assessment year is less than the full amount of the development rebate.

Subsection 3 defines that where, in a scheme of amalgamation, the amalgamating company sells or otherwise transfers to the amalgamated company any ship, machinery or plant in respect of which a development rebate has been allowed to the amalgamating company under sub-section (1) or sub-section (1A).

Subsection 4 says that where a firm is succeeded to by a company in the business carried on by it as a result of which the firm sells or otherwise transfers to the company any ship, machinery, or plant, the provisions of clauses (a) and (b) of sub-section (3) shall, so far as may be, apply to the firm and the company.

Subsection 5 says that the Central Government, if it considers it necessary or expedient so to do, may, by notification in the Official Gazette, direct that the deduction allowable under this section shall not be allowed in respect of a ship acquired or machinery or plant installed after such date, not being earlier than three years from the date of such notification, as may be specified therein.

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