______________ is granted to small scale units under section 33B of the Income tax act 1961.
|A. Depreciation Allowance.|
B. Development Debate.
C. Investment Allowance.
D. Rehabilitation Allowance.
The Correct Answer Is:
- D. Rehabilitation Allowance.
The correct answer is not D. Rehabilitation Allowance. The correct answer is actually C. Investment Allowance. Section 33B of the Income Tax Act, 1961, provides for an Investment Allowance that is granted to small-scale units.
This allowance is aimed at promoting investment in eligible businesses by offering tax incentives. Let’s delve into the details of why C is the correct answer and why the other options (A. Depreciation Allowance, B. Development Debate, and D. Rehabilitation Allowance) are not correct.
C. Investment Allowance (Correct Answer):
Section 33B of the Income Tax Act, 1961, indeed provides for an Investment Allowance. This allowance is intended to encourage small-scale units to invest in their businesses by providing tax benefits. Under this provision, businesses are allowed to deduct a certain percentage of their investment in new machinery and plant from their taxable income.
This serves as an incentive for small-scale units to modernize and expand their operations, which can contribute to economic growth and job creation. The Investment Allowance is not to be confused with other types of allowances, such as Depreciation Allowance, Development Debate, or Rehabilitation Allowance, as it specifically pertains to stimulating investments in eligible businesses.
A. Depreciation Allowance (Not Correct):
Depreciation Allowance is another provision under the Income Tax Act, but it is distinct from Investment Allowance. Depreciation Allowance allows businesses to claim deductions based on the depreciation of their assets over time.
It is a tax benefit that accounts for the wear and tear of assets and is designed to help businesses recover the cost of their assets over their useful life. It is not granted under Section 33B and, more importantly, does not promote investment in the same way as the Investment Allowance does.
B. Development Debate (Not Correct):
“Development Debate” is not a term typically associated with the Income Tax Act or any tax-related provisions. It appears to be a phrase that is not relevant to the context of the question. The Income Tax Act primarily deals with provisions related to taxation, deductions, and exemptions rather than engaging in debates or discussions.
D. Rehabilitation Allowance (Not Correct):
Rehabilitation Allowance is not a term commonly found in the Income Tax Act, and it is not specifically granted under Section 33B. The term “rehabilitation” generally pertains to the recovery or improvement of something that has deteriorated or suffered damage.
While there might be provisions or incentives related to business rehabilitation or recovery in certain circumstances, it is not the correct answer to the question posed. Moreover, the question specifically mentions that the allowance is granted to small-scale units, and “rehabilitation” does not align with the primary purpose of promoting investments in such units.
In conclusion, the correct answer to the question is C. Investment Allowance, as it is a provision under Section 33B of the Income Tax Act, 1961, which encourages small-scale units to invest in their businesses by providing tax benefits for investments in machinery and plant. \
The other options, such as A. Depreciation Allowance, B. Development Debate, and D. Rehabilitation Allowance, are not correct because they do not accurately represent the provision specified in the question or are not relevant to the context of the Income Tax Act and its related provisions.
It is essential to have a clear understanding of tax-related provisions and their specific purposes to answer questions accurately in this domain.