Section  35 D of Income Tax Act                                                                                                                                   

The principal piece of legislation that controls how people, businesses, and other entities are taxed in India is the Income Tax Act, 1961.

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Section 35D establishes payment reduction rules for particular upfront costs incurred by an Indian business or a resident who is preparing to launch a venture

This deduction only applies to a certain group of expenses that were classified under specific headings on March 31, 1970.

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– A firm or an Indian person may claim tax deductions under Section 35D of the Income Tax Act for expenses incurred in advance of a specific activity.

– The total project cost or capital used for the company’s operations should not exceed 5% of the maximum deductible amount.

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To prevent any potential disagreements with the tax authorities, it is crucial to make sure that the eligibility requirements are met and that the right documentation is kept.

– The expense has to be made either before the business started up or the year before the business started up.