Deduction for Whom  

This deduction is only available to an assesse who is engaged in the  business of 

Prospecting for/Extraction of/Production of

Petroleum,Natural Gas or Both

+

Central Government has entered into agreement for Such purpose

 

 

Where to Deposit

The deduction is  available only if  certain  amount is deposited  in

 (a) SBI   (State Bank of India)

      As per Scheme of Ministry of Petroleum and Natural Gas,Govt of India

(b)  Any Site Restoration Account (also called Deposit Scheme)

As per Scheme of Ministry of Petroleum and Natural Gas,Govt of India

 

Amount of Deduction

(1) The amount of deduction available is

     (a) Amount deposited

     (b) 20% of PGBP without considering Section 33ABA deduction

whic hever is less.

 

 

Time Period to Deposit

6 months from end of the financial year  in which deduction claimed. i.e.  30 September

         Or

Return Fililng Date  (31 July/30 September/30 November)

Which ever is earlier

EXAMPLE

S.NO PARTICULARS CASE 1 CASE 2 CASE 3
A DUE DATE OF ITR 31-Jul 30-Sep 30-Nov
B 6 MONTH FROM END OF FY 30-Sep 30-Sep 30-Sep
C Amount to be deposited by 31 July 30-Sep 30-Sep
  (earlier of A AND B)      

 

  Section 33ABA Site Restoration Fund - Special Cases

 

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 low then separate audit under this  section not required .However audit report in Form 3C required

 

All other Points Similar to Section 33AB :-

How to utilize amount Deposited .

It is to be utilized only as per scheme 

However,Amount  not allowed  to be utilized  for  :

  1. Purchase of  machinery which is to be  used in office / home / guest house  .
  2. Any  office appliance s (however computer allowed)
  3. Any plant & machinery whose 100% cost allowed as deduction under PGBP (for example  100% depreciation assets )
  4. Any machinery which is used is used for manufacture of  prohibited item  mentioned in  Eleventh schedule .

 

Withdrawal of deposit

Case

Taxability

Closure of business

Taxable

Dissolution of firm

Taxable

 Partition of H.U.F

Not taxable

Death of assesse

Not taxable

 Liquidation of company .

Not taxable

 

If amount withdrawn or but not used as per scheme then it will be  treated as income and charged to Income Tax.

 

Asset Acquired Out of Funds of Scheme

Such assets should  not be transferred within 8 years

If transferred it will be treated as income of year in which it is transferred.

Exceptions

However in the following cases  these is no restriction of 8 years .

  1. Assets sold to government / Local Authority /  Government Company
  2. Conversion of partnership into company if all assets liabilities are transferred to company and all partners becomes the shareholder/members of the company .
  1. Income Tax
  2. PGBP Income
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CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 6 years. He provides courses for Practical Accounts, Taxation and Efiling at teachoo.com .
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