What is Rehabilitation allowance? Section
Income Tax Act 1961
Rehabilitation allowance is defined under section
33B of Income Tax Act 1961.
Provisions under this section is:
of Income Tax Act "Rehabilitation allowance"
33B. Where the business of any industrial undertaking
carried on in India is discontinued in any previous year by
reason of extensive damage to, or destruction of, any
building, machinery, plant or furniture owned by the
assessee and used for the purposes of such business as a
direct result of -
(i) flood, typhoon, hurricane, cyclone, earthquake or
other convulsion of nature ; or
(ii) riot or civil disturbance ; or
(iii) accidental fire or explosion ; or
(iv) action by an enemy or action taken in combating an
enemy (whether with or without a declaration of war),
and, thereafter, at any time before the expiry of
three years from the end of such previous year, the business
is re-established, reconstructed or revived by the assessee,
he shall, in respect of the previous year in which the
business is so re-established, reconstructed or revived, be
allowed a deduction of a sum by way of rehabilitation
allowance equivalent to sixty per cent of the amount of the
deduction allowable to him under clause (iii) of sub-section
(1) of section 32 in respect of the building, machinery,
plant or furniture so damaged or destroyed :
Provided that no deduction under this section shall be
allowed in relation to the assessment year commencing on the
1st day of April, 1985, or any subsequent assessment year.
Explanation.—In this section, "industrial undertaking"
means any undertaking which is mainly engaged in the
business of generation or distribution of electricity or any
other form of power or in the construction of ships or in
the manufacture or processing of goods or in mining.