Investment allowance

A deduction should be granted for any ship, aircraft, machinery, or plant that belongs to the assessee and is used exclusively for the conduct of his business in the prior year in which the ship, aircraft, machinery, or plant was purchased or installed. If the ship, aircraft, machinery, or plant is first used in the immediately prior year, the assessee will be given an amount as an investment allowance equivalent to 25% of the real cost of the ship, aircraft, machinery, or plant for the prior year. Marvellous topic on 80g income tax begins here.

As long as the words "twenty-five percent" are replaced with the words "twenty percent," this sub-section will apply to any ship, aircraft, machinery, or plant listed in the sub-section (8B).

Additionally, no deduction will be permitted under this clause in relation to:-

(a) Any equipment or plant placed in a business or residential building, including a lodging facility with guest-house characteristics;

(b) any office equipment or motorised transportation;

(c) Any ship, equipment, or plant that is eligible for a deduction as a development rebate under Section 33; and

(d) Any machinery or plant, the entire real cost of which is permitted as a deduction (whether via depreciation or other means) in calculating the income taxable under the category "Profits and profits of business or profession" of any prior year.

For the purposes of this subsection, "real cost" refers to the ship, aircraft, machinery, or plant's actual cost to the taxpayer, less the portion of that cost that has been covered by the sum released to the taxpayer.

The following are the ships, aeroplanes, pieces of machinery, or plants that are meant by the above sub-section:-

(a) a new ship or new aircraft purchased by an assessee involved in the operation of ships or aircraft after March 31, 1976;

(b) any new equipment or facilities built after March 31, 1976:-

(i) for the purposes of conducting business in the generation, distribution, or any other use of power; or

(ii) in a small-scale industrial setting for the purpose of producing or manufacturing any good or service; or

(iii) in any other industrial venture for the purpose of conducting a business of building, manufacturing, or producing any object or thing, other than an article or thing included in the Eleventh Schedule.

  However, nothing in clauses (a) and (b) shall apply with respect to,

     (i) a new ship or aircraft is purchased, or

     (ii) any newly installed gear or facilities,

   after the 31st of March 1987 but prior to the 1st of April 1988, unless such ship or aircraft is established or such machinery or plant is installed in the procedures set forth in clause (a) of sub-section (8B) and the assessee provides evidence to the satisfaction of the Assessing Officer as set forth in that clause;

(c) any new machinery or plant installed after March 31, 1983, but before April 1, 1987, for the purpose of conducting repairs on powered craft, including ocean-going vessels, if the business is conducted by an Indian company and is currently sanctioned for the purposes of this section by the Central Government.

Know about 80g exemption list.