Section 42: Special Provision for deduction in case of business for prospecting etc. for mineral oil - Income Tax - Ready Reckoner - Income Tax

Section 42 : Special Provision for deduction in case of business for prospecting etc. for mineral oil Any person carrying on the business of prospecting or extraction or production of mineral oil (including Petroleum Natural Gas) in the agreed area under an agreement and in association with CG etc. Deductions : Following additional allowance, in lieu of or in addition to the normal provisions of the Act: a) Infructuous or abortive exploration expenses prior to the beginning of commercial production. b) Expenditure incurred before or after beginning of such commercial production in relation to :- (i) any drilling activities or services, or (ii) any exploration activities or services, or (iii) physical assets used in that connection with (i) or (ii) (except those assets which quality for depreciation u/s 32 ) c) For the depletion of mineral oil in the mining area in PY in which commercial production has begun or in succeeding year as specified in agreement. The above allowances shall be allowed only if these are specified in the agreement which the assessee had entered into with the central Govt, etc. Further, the allowances shall be computed and made in the manner specified in the agreement.