Section 35D → Section 36
Amortisation of certain preliminary expenses
Quick Answer
Section 35D of the Income Tax Act, 1961 (Amortisation of certain preliminary expenses) corresponds to Section 36 of the Income-tax Act, 2025, effective 1st April 2026. Status: Retained.
What changed for Section 35D
Under the Income Tax Act, 1961, Section 35D governs amortisation of certain preliminary expenses. Allows an Indian company or a resident non-corporate assessee to amortise preliminary expenses (like drafting MOA, feasibility reports) over 5 successive years.
The new code maps this to Section 36: the provision is retained and renumbered as Section 36 of the Income-tax Act, 2025, applying from 1st April 2026. Retained. Eases the initial cash flow burden for newly incorporated businesses.
On the ground, changes to Section 35D carry a Medium impact. Standard tax planning tool for new startups.
Sec 35D
Provision Summary
Allows an Indian company or a resident non-corporate assessee to amortise preliminary expenses (like drafting MOA, feasibility reports) over 5 successive years.
Sec 36
Provision Summary
Retained. Eases the initial cash flow burden for newly incorporated businesses.
Key Changes & Highlights
- Requirement to get reports certified by a prescribed authority has been completely digitized and relaxed.
Frequently Asked Questions
What does Section 35D of the Income Tax Act 1961 deal with?
Section 35D of the Income Tax Act, 1961 covers amortisation of certain preliminary expenses. Allows an Indian company or a resident non-corporate assessee to amortise preliminary expenses (like drafting MOA, feasibility reports) over 5 successive years.
Where does Section 35D of the ITA 1961 go under the Income-tax Act, 2025?
Section 35D of the Income Tax Act, 1961 maps to Section 36 of the Income-tax Act, 2025, effective 1st April 2026 (status: Retained). Retained. Eases the initial cash flow burden for newly incorporated businesses.
Why does the change to Section 35D matter for taxpayers?
The transition impact for Section 35D is rated Medium. Standard tax planning tool for new startups.
What are the key changes to Section 35D under the Income-tax Act, 2025?
Requirement to get reports certified by a prescribed authority has been completely digitized and relaxed. These points are specific to Section 35D (Amortisation of certain preliminary expenses).
Disclaimer: This mapping of Section 35D (Amortisation of certain preliminary expenses) to Section 36 of the Income-tax Act, 2025 is for educational and reference purposes only, based on publicly available drafts and circulars. As Section 35D is currently marked Retained, always confirm its treatment with a qualified Chartered Accountant before filing or making compliance decisions.
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