Section 30 of the Income Tax Act
Income-tax Act, 2025: s.28
Section 30 of the Income-tax Act, 1961 corresponds to section 28 (Rent, rates, taxes, repairs and insurance) of the Income-tax Act, 2025.
Read section 28 of the 2025 Act
Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.
The decision most relied on for Section 30 is ACG Associated Capsules (P) Ltd. v. CIT (343 ITR 89), cited in 144 of the 167 judgments on BharatTax that turn on this section.
Leading authorities on Section 30
For calculation of deduction under Section 80HHC, if total interest is netted off after adjusting interest paid and received, the 90% reduction specified in Explanation (baa) is not applicable.
Rule 5(a) of the First Schedule to the Income Tax Act applies to add back an amount only if it is an expenditure or allowance contemplated in sections 30 to 43A and is specifically disallowed. Without such a specific prohibition, amounts like provisions for preference share redemption or amortization cannot be added back to an insurance company's profits.
Expenditure qualifies as 'current repairs' if it maintains existing machinery without replacement, creates no new asset, restores functional efficiency without increasing capacity, and is not an independent unit. Conversely, the cost of replacing machinery, especially independent units, constitutes capital expenditure.
Expenditure incurred wholly and exclusively for the purpose of business is deductible, even if it is unremunerative or does not yield an immediate profit. The absence of a corresponding receipt does not negate the deductibility of such an expense.
Expenditure incurred on improvements like flooring, partition, wiring, and false ceiling in existing premises is treated as revenue expenditure, not capital expenditure, even if it provides some lasting benefit. Such expenses are deductible if made for efficiently carrying on the business.
If the actual cost of an asset was wrongly assessed in earlier years, it can be recomputed and corrected in subsequent assessment years. Interest incurred before production on borrowed money for plant construction can be capitalized and added to the cost of fixed assets.
Disallowance under Section 40(a)(i) for payments to a US resident is not permissible if it imposes harsher conditions than those applicable to payments made to an Indian resident, due to the non-discrimination clause in the India-US Double Taxation Avoidance Agreement (DTAA).
Expenditure on repairs is revenue in nature if it preserves or maintains an existing asset, rather than creating a new asset or advantage. The duration of the benefit from repairs does not determine if the expenditure is capital.
The High Court's direction to the CIT(Appeals) to consider specific Supreme Court judgments implies that cases may be decided on merits by appellate authorities based on relevant precedents without necessarily remanding them to the Assessing Officer.
Expenditure on Corporate Social Responsibility (CSR) activities is an allowable deduction under section 80G of the Income Tax Act, provided the conditions stipulated in section 80G are met, irrespective of being part of CSR expenditure.
