Furnishing of a statement in form 3AF for claiming deduction with regard to preliminary expenses incurred under section 35D under income tax act 1961
Section 35D of the Income Tax Act, 1961, provides for the amortization of certain preliminary expenses incurred by a business or profession. These expenses are incurred before the commencement of the business or profession and include expenses such as legal fees, registration fees, and incorporation fees for claiming deduction assessee has to submit the form 3AF. This form must be submitted one month prior to the due date for filing the income tax return.
Section 35D of the income tax act 1961 allows deduction of the amount equal to one-fifth of the preliminary expenses incurred in connection with—
(i) preparation of feasibility report;
(ii) preparation of project report;
(iii) conducting market survey or any other survey necessary for the business of the assessee;
(iv) engineering services relating to the business of the assessee
Provided that the assessee shall furnish a statement containing the particulars of expenditure specified in this clause within such period, to such income-tax authority, in such form and manner, as may be prescribed;
Rule 6ABBB of the income tax rule specify the form in which statement to be furnished with regard to preliminary expenses incurred under section 35D as follows
(1) The statement containing particulars of expenditure required to be furnished under proviso to clause (a) of subsection (2) of section 35D by the assessee shall be in Form No. 3AF for each previous year.
(2) Form No. 3AF shall be furnished one month prior to the due date for furnishing the return of income as specified under sub-section (1) of section 139.
(3) Form No. 3AF shall be furnished to the Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems), as the case may be, or any person authorised by the Principal Director General of Income-tax (Systems) or Director General of Income-tax (Systems).
(4) Form No. 3AF, shall be furnished electronically,
- under digital signature, if the return of income is required to be furnished under digital signature;
- through electronic verification code in a case not covered under clause (i).
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