Section 35CCC and Section 35CCD: Agricultural Extension and Skill Development Project Expenditure
Sections 35CCC and 35CCD of the Income-tax Act, 1961 dealt with deductions for expenditure on notified agricultural extension projects and skill development projects. From 1 April 2026, the Income-tax Act, 2025 is in force and the corresponding provisions are consolidated in Section 47.
What does Section 47 of the Income-tax Act, 2025 provide?
Section 47 permits deduction of qualifying expenditure, excluding the cost of land or building, incurred on specified notified projects. It covers an agricultural extension project undertaken by any assessee and a skill development project undertaken by a company. The project must be notified by the Central Board of Direct Taxes in accordance with the prescribed guidelines.
If deduction for an expenditure is claimed and allowed under Section 47, the same expenditure cannot again be deducted under another provision for the same or any other tax year. This prevents double deduction.
| Project | Eligible taxpayer | Current provision | Core condition |
|---|---|---|---|
| Agricultural extension project | Any assessee | Section 47(1)(a), Income-tax Act, 2025 | Project must be notified under the prescribed rules; land and building cost is excluded. |
| Skill development project | Company | Section 47(1)(b), Income-tax Act, 2025 | Project must be notified under the prescribed rules; land and building cost is excluded. |
Agricultural extension project: meaning and conditions
An agricultural extension project is, in practical terms, a qualifying project for the training, education and guidance of farmers. Under the current rules, the approval framework requires compliance with the prescribed project conditions and CBDT notification procedure.
The corresponding framework is contained in Rules 37 and 38 of the Income-tax Rules, 2026. Among the principal approval conditions, the project is to be undertaken for training, education and guidance of farmers, requires prior approval of the Ministry of Agriculture and Farmers Welfare, and must satisfy the prescribed expenditure threshold and procedural requirements.
Skill development project: meaning and conditions
A skill development project for this deduction is a qualifying notified project undertaken by an eligible company in accordance with the prescribed framework. The expenditure eligible for deduction does not include the cost of land or building.
The corresponding framework is contained in Rules 39 and 40 of the Income-tax Rules, 2026. The rules deal with approval and notification conditions, including the project structure, records and audit-related requirements applicable to qualifying projects.
Legacy Section 35CCC of the Income-tax Act, 1961
Section 35CCC applied where an assessee incurred expenditure on an agricultural extension project notified by the Board in accordance with the prescribed guidelines. For earlier years the provision had allowed a weighted deduction; however, from assessment year 2021-22 the deduction was reduced to an amount equal to the qualifying expenditure. A deduction allowed under Section 35CCC could not also be claimed under another provision for the same expenditure.
Legacy Section 35CCD of the Income-tax Act, 1961
Section 35CCD applied where a company incurred qualifying expenditure, other than expenditure in the nature of the cost of land or building, on a skill development project notified by the Board under the prescribed guidelines. The weighted deduction applicable in earlier years was reduced to an amount equal to the qualifying expenditure from assessment year 2021-22. Double deduction of the same expenditure was prohibited.
Transition from Sections 35CCC and 35CCD to Section 47
The Income-tax Act, 2025 came into force on 1 April 2026 and replaced the Income-tax Act, 1961, subject to the statutory transition and savings provisions. The subject matter of former Sections 35CCC and 35CCD is now brought together in Section 47. Accordingly, the relevant year and the applicable transition provisions should be checked before deciding which statutory text governs a particular claim, assessment, appeal or other proceeding.
Official references
- Income-tax Act, 2025 - official text
- Income Tax Department - Income-tax Act, 2025 and Rules, 2026 resources
- Legacy Section 35CCC - official Income Tax Department page
Law position reviewed: 28 September 2026. This article is a general statutory guide; applicability can depend on the relevant tax year, notification, project approval and transition provisions.