16C. Industrial and manufacturing allowance for machinery and plant

Notwithstanding sections 16 and 16B, where a person carrying on a trade, profession or business incurs capital expenditure on the installation of machinery or plant for the production of products by any of the industries specified in Schedule 5, he shall, in lieu of the allowances provided by sections 16 and 16B, be entitled for an annual allowance of 100 per cent in respect of the capital expenditure incurred.

Where a person proves to the satisfaction of the Collector that he has incurred capital expenditure during the basis period relevant to the year of assessment on the installation of machinery or plant for the production of products by any of the industries specified in Schedule 5, there shall be allowed on due claim, in addition to the allowance provided by subsection (1), an additional allowance at the rate of 50 per cent of the capital expenditure incurred on the provision of that machinery or plant.

Any claim for allowances under this section shall be made at the time of lodgment of the return of income for the relevant years of assessment or within such further time as the Collector may allow.

Where any allowance has been claimed and allowed under this section for any year of assessment, no allowances shall be made in any subsequent year of assessment under any other provision of this Act, in respect of such expenditure.

Where any allowance has been made to any person under subsection (2), in respect of any machinery or plant and the person disposes off the machinery or plant within the period of one year from the provision of such machinery or plant, any allowance made under subsection (2), shall be brought to charge as if the allowance was not made, and be deemed as income for the year of assessment relating to the basis period in which the disposal occurs. The provisions of section 62 shall, so far as may be, apply, accordingly. The period of 6 years specified in that section shall be reckoned from the end of the year of assessment relevant to the basis period in which the disposal was discovered.

Such person shall give notice to the Collector of such disposal within 30 days of the disposal.

This section applies to machinery and plant installed between the 1st day of January 2014 and the 31st day of December 2019.

Tax credit under section 42B shall not be available in respect of plant or machinery entitled to allowance under this section.