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

Under the Income-tax Act, 2025 (applicable from the June 2027 session), a company engaged in extracting petroleum in India under an agreement with the Central Government deposits money in a specified site restoration account. Which of the following is a condition for claiming the deduction under Schedule X?

The assessee must get the accounts of the business audited by an accountant before the specified date and furnish the audit report by that date. The deposit must be made before the tax year ends, in the specified account, and the business must be petroleum or natural gas under a Central Government agreement.

  1. AThe accounts of the business must be audited by an accountant and the audit report furnished by the specified dateCorrect
  2. BThe deposit must be made only after the end of the tax year, before the return due date
  3. CThe assessee must be a company and not a firm or association of persons
  4. DThe deposit must be made only in a current account with any scheduled bank

Explanation

Schedule X requires, among other conditions, that the accounts of the business be audited by an accountant before the specified date and the audit report furnished by that date. The deposit must be made before the end of the tax year, not after. Firms and AOPs can also claim it, though partners or members cannot claim it separately. The account must be a special account with SBI or a site restoration account under the deposit scheme.

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