Skip to content

CS Executive · Tax Laws and Practice · Deductions

Meera Constructions Ltd has a gross total income of ₹90 lakh that includes ₹40 lakh of profits of an eligible business for which it claims an incentive deduction under Part C of the Chapter. It did not furnish its return of income on or before the due date specified under section 263(1). What is the position under the Income-tax Act, 2025?

The Part C deduction is not allowed. Section 122(5) of the Income-tax Act, 2025 denies Part C deductions to an assessee who does not furnish the return on or before the due date under section 263(1), so a late return cannot support the claim on the eligible profits.

  1. AThe Part C deduction is not allowed because the return was not furnished by the due dateCorrect
  2. BThe deduction is allowed in full as the claim is made in the belated return
  3. CThe deduction is allowed at 50% of the eligible profits
  4. DThe deduction is allowed only if the profits exceed ₹50 lakh

Explanation

Section 122(5) denies Part C deductions to an assessee who fails to furnish the return by the due date under section 263(1) or fails to claim the deduction in that return. A belated return therefore does not save the claim; no half-allowance exists.

Did you get it right without looking?

One question tells you little. A timed set on Deductions shows your real accuracy, how long you take and where you lose marks.

Practise DeductionsFree diagnostic mock

More Deductions questions