Section 35CCB of Income Tax Act 1961: Expenditure on Conservation of Natural Resources

Section 35CCB provided a deduction for specified payments made for approved programmes of conservation of natural resources or afforestation. The provision was time-limited: qualifying expenditure had to be incurred on or before 31 March 2002.

Current legal position: Section 35CCB is not a deduction for new expenditure in 2026. The Income-tax Act, 1961 has been repealed from 1 April 2026 by the Income-tax Act, 2025, subject to the repeal-and-savings provisions in Section 536. Section 35CCB therefore remains relevant principally when examining historical claims, proceedings, rights or liabilities preserved by the transition provisions.

What did Section 35CCB provide?

Under the former Income-tax Act, 1961, Section 35CCB dealt with expenditure by way of payment to specified associations, institutions or an eligible afforestation fund for programmes concerning conservation of natural resources or afforestation.

The deduction was linked to expenditure incurred on or before 31 March 2002. Accordingly, the section should now be read as a historical deduction provision rather than a current incentive for fresh payments.

In simple terms: where the statutory conditions were satisfied, an assessee could deduct the qualifying amount paid during the relevant previous year. The provision also prevented the same expenditure from being deducted again under another provision.

Conditions under Section 35CCB(1)

For expenditure falling within the historical time limit, sub-section (1) covered payments made:

to an association or institution having the object of undertaking programmes for conservation of natural resources or afforestation, where the payment was to be used for a programme approved by the prescribed authority; or
to an afforestation fund notified by the Central Government.

Subject to sub-section (2), the qualifying expenditure was deductible in computing income for the previous year in which it was incurred.

Approval requirement under Section 35CCB(2)

For a payment to an association or institution under clause (a) of sub-section (1), the association or institution had to be approved for this purpose by the prescribed authority. The statutory proviso limited an approval to a maximum period of three years at a time.

No double deduction under Section 35CCB(3)

Where a deduction under Section 35CCB was claimed and allowed for an assessment year in respect of qualifying expenditure, the same expenditure could not also be deducted under another provision of the Income-tax Act, 1961 for the same or any other assessment year.

Section 35CCB at a glance

Point	Position
Nature of provision	Legacy deduction for specified conservation and afforestation payments.
Last date for qualifying expenditure	31 March 2002.
Eligible recipient under clause (a)	An approved association or institution undertaking qualifying conservation or afforestation programmes.
Other eligible payment	Payment to an afforestation fund notified by the Central Government.
Approval	Required for the association or institution under sub-section (2); approval could not exceed three years at a time.
Double deduction	Not permitted for expenditure already allowed under Section 35CCB.
Position from 1 April 2026	The Income-tax Act, 1961 is repealed, subject to Section 536 of the Income-tax Act, 2025 preserving specified prior operations, rights, liabilities and proceedings.

Why the 31 March 2002 cutoff matters

The cutoff means a payment made after 31 March 2002 does not become deductible merely because its purpose relates to conservation of natural resources or afforestation. Any present-day tax treatment must be determined under the law applicable to the relevant tax year rather than by treating Section 35CCB as an ongoing deduction.

Income-tax Act 2025 and transition from the 1961 Act

The Income-tax Act, 2025 applies from 1 April 2026. Its Section 536 repeals the Income-tax Act, 1961 while preserving specified matters connected with the repealed law. Among other things, the savings framework protects prior operation of the repealed Act and provides for the continuation of specified proceedings relating to tax years beginning before 1 April 2026.

Therefore, a dispute concerning an old Section 35CCB claim should be examined with the applicable saving provision and the facts of the relevant year. This page should not be read as suggesting that Section 35CCB creates a new deduction for tax year 2026-27 or later.

Official Income Tax Department resources

Legal note: This article is a general explanation of a legacy statutory provision. For a live assessment, appeal or other proceeding, the law applicable to the relevant tax year and the transition provisions should be checked.