Site Restoration Fund (Deduction for Petroleum & Natural Gas Business) - Section 33ABA - Income Tax - Ready Reckoner - Income Tax

Site Restoration Fund (Deduction for Petroleum Natural Gas Business) Section 33ABA Applicability: Applicable to an assessee carrying on business, consisting of prospecting or extraction or production of petroleum or natural gas or both, in India, in respect of which the Central Govt. has entered into an agreement with the assessee. Deposits: Deposit shall be made before the end of previous year with- A. SBI in a scheme approved by Ministry of petroleum and Natural gas. B. Site Restoration Account. Amount of deduction: Least of the following is deductible - A. Amount deposited, or B. 20% of current year profit of such business. Provided: Deduction u/s 33ABA shall not be allowed in computation of income of a partner of a firm or member of AOP or BOI, if deduction is claimed under this section by the firm or AOP or BOI. Where any deduction of amount deposited in the special account has been allowed under this sub-section in any PY, then no deduction shall be allowed for such amount in any other PY. Any amount credited in the special account or site restoration account by way of interest shall be deemed to be a deposit. The deduction under this section shall not be admissible unless the accounts of such business of the assessee are audited by an accountant and assessee furnishes along with his return of income the audit report duly signed and verified by such accountant. Time period of deposit: The aforesaid amount shall be deposited before the end of Previous Year i.e. 31st March. Utilisation of Deposit: The amount kept in the deposit will be allowed to be withdrawn to be utilized for- A. Purpose of business other than for declaration of dividend or distribution of profits, or B. Purchase of eligible assets as per the scheme. However, such expenditure will not be allowed as deduction in computation of income under the head profits and Gains of Business or Profession . Ineligible Assets: The deposit should not be utilized for the purpose of acquisition of the following ineligible assets- A. Plant and machinery installed in office or residential accommodation or guesthouse. B. Office appliances other than computer. C. Plant and machinery entitled for 100% deduction. D. Plant and machinery installed in an industrial undertaking manufacturing any article specified in Eleventh schedule. Withdrawal of Deduction: A. Amount withdrawn from the deposit on closure of the account and any excess amount over and above paid to Central Govt. u/s 42 shall be deemed as profits or gains of business or profession. B. Where any amount is realized as per the scheme during the previous year, and the amount is not so utilized within the previous year or not utilized as per the scheme, it shall be chargeable to tax as the income from business or profession. C. Where the newly acquired asset is transferred or sold within 8 years from the end of the previous year in which it is acquired, the portion of the deduction already allowed should be treated as income of the previous year in which the asset is sold or otherwise transferred. D. Exception: The above conditions shall not apply in the following situations: i. Transfer to Government or local authority or Corporation or Government Company. ii. Succession of firm by a company. Audit Requirement Compulsory Audit required by CA, to claim deduction, CA should give report in prescribed form ( Form 3AD ). If accounts already audited under any law, then separate audit under this section not required. However audit report in Form 3C required.