Investment deposit account

If an assessee's total income includes money subject to tax under the "Profits and Gains of Business or Profession" category and, out of such income,

   (a) before the expiration of six months from the end of the preceding year or before providing the return of his income, whichever is sooner, placed any sum in an account (hence in this section referred to as a deposit account); or

   (b) used any funds during the previous year to purchase any new ship, new aircraft, new machinery, or new plant without depositing any funds into the deposit account, a plan to be formulated by the Central Government, or if the assessee is engaged in the business of growing and production tea in India, a plan to be approved in this regard by the Tea Board, the assessee shall be permitted a deduction of:-

    (i) an amount equal to the amount, or the total of the amounts, so deposited and any amount so used; or

  (ii) an amount equivalent to 20% of the assessee's commercial or professional earnings as determined by the assessee's accounts.

Great news about 80g exemption list.

The deduction under this section must not be permitted in the calculation of the income of any partner or, as applicable, any member of such company, an association of persons, or a body of individuals where the assessee is such an entity.

In connection to the assessment year beginning on April 1, 1991, or any future assessment year, no such reduction shall be permitted.

"New ship" or "new aircraft" comprises a ship or aircraft that was not previously owned by any person residing in India and was being operated by another person as of the date of purchase by the assessee.

If the following criteria are met, then "new machinery or plant" includes any machinery or plant that, prior to being installed by the assessee, was utilised by any other person outside of India:-

  (a) Such equipment or plant was not utilised in India at any time prior to the assessee's installation;

  (b) the machinery or plant in question is brought into India from any other nation; and

  (c) In computing the total revenue of any person for any period anterior to the date on which the assessee installed the machinery or plant, no deduction on account of degradation in respect of that machinery or plant has been given or is allowed under this Act.

The Tea Board formed under Section 4 of the Tea Act of 1953 is referred to as the "Tea Board" (29 of 1953).

Click here to know section 12a of income tax act.