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CS Executive · Tax Laws and Practice · Profits and Gains from Business and Profession

Under Schedule X of the Income-tax Act, 2025 (effective from the June 2027 session), which assessee is eligible for the site restoration fund deduction in computing business income?

The deduction is available to an assessee prospecting for, extracting or producing petroleum or natural gas in India under an agreement with the Central Government, because Schedule X ties the benefit to that specific business and agreement. Cement makers, coal contractors and petroleum traders do not qualify.

  1. AA manufacturer of cement that deposits money in a reserve account with a scheduled bank
  2. BAn assessee carrying on business of prospecting for or extraction or production of petroleum or natural gas in India under an agreement with the Central GovernmentCorrect
  3. CA mining contractor extracting coal under a State Government lease
  4. DA trader in petroleum products who has opened a deposit account with SBI

Explanation

Paragraph 2(1)(a) of Schedule X requires the assessee to carry on the business of prospecting for, or extraction or production of, petroleum or natural gas or both in India, and to have an agreement with the Central Government. The other options are not covered by this requirement, so no deduction is available to them.

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