CS Executive · Tax Laws and Practice · Profits and Gains from Business and Profession
Under Schedule X of the Income-tax Act, 2025 (applicable from June 2027), which assessee can claim the site restoration fund deduction while computing business income?
The deduction is available only to an assessee carrying on the business of prospecting for, extracting or producing petroleum or natural gas in India under an agreement with the Central Government. Other businesses do not qualify, even if they make deposits for site restoration.
- AAn assessee engaged in prospecting for or extraction or production of petroleum or natural gas in India under an agreement with the Central GovernmentCorrect
- BAny manufacturing company that deposits money in a bank account for restoring its factory site
- CAn assessee engaged in mining of coal under a licence from a State Government
- DAny assessee carrying on business in India that deposits money in a special account with the State Bank of India
Explanation
Paragraph 2(1)(a) of Schedule X limits the deduction to an assessee carrying on the business of prospecting for, or extraction or production of, petroleum or natural gas in India under an agreement with the Central Government. Businesses in other sectors, such as coal mining or manufacturing, do not qualify merely by depositing money in an account.
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