Clause 16 - Insertion of new section 35ABA- Expenditure for obtaining right to use spectrum for telecommunication services. - Finance Bill, 2016

Insertion of new section 35ABA. 16. After section 35AB of the Income-tax Act, the following section shall be inserted with effect from the 1st day of April, 2017, namely:- Expenditure for obtaining right to use spectrum for telecommunication services. 35ABA. (1) In respect of any expenditure, being in the nature of capital expenditure, incurred for acquiring any right to use spectrum for telecommunication services either before the commencement of the business or thereafter at any time during any previous year and for which payment has actually been made to obtain a right to use spectrum, there shall, subject to and in accordance with the provisions of this section, be allowed for each of the relevant previous years, a deduction equal to the appropriate fraction of the amount of such expenditure. (2) The provisions contained in sub-sections (2) to (8) of section 35ABB, shall apply as if for the word licence , the word spectrum had been substituted. Explanation.- For the purposes of this section,- (i) relevant previous years means,- (A) in a case where the spectrum fee is actually paid before the commencement of the business to operate telecommunication services, the previous years beginning with the previous year in which such business commenced; (B) in any other case, the previous years beginning with the previous year in which the spectrum fee is actually paid, and the subsequent previous year or years during which the spectrum, for which the fee is paid, shall be in force; (ii) appropriate fraction means the fraction, the numerator of which is one and the denominator of which is the total number of the relevant previous years; (iii) payment has actually been made means the actual payment of expenditure irrespective of the previous year in which the liability for the expenditure was incurred according to the method of accounting regularly employed by the assessee. .