Section 35AD → Section 46

100% deduction of capital expenditure for specified businesses (warehousing, hotels, hospitals, pipelines, etc.)

Section 35AD of the old Income-tax Act, 1961 · new section 46 under the Income-tax Act, 2025

New reference Section 46

Income-tax Act, 1961Section 35AD

Optional deduction of 100% capital expenditure for specified businesses
Pre-commencement expenditure allowed in the year of commencement
No other deduction for the same expenditure; losses ring-fenced

Applies to FY 2025-26 (AY 2026-27) and earlier years.

Income-tax Act, 2025Section 46

Same option, now section 46
Conditions: not formed by splitting up or reconstruction, no used plant transferred
Specified businesses listed in 46(11)

Applies from tax year 2026-27 (from 1 April 2026).

What changed

Renumbered; conditions carry over.

Practice notes

Not available to companies opting for the 22% rate under section 200 (old 115BAA).

These are summaries, not the statutory text. Read the bare Act for both sections on the Income Tax Department's official site, which also has a side-by-side comparison utility.

Frequently asked

What is section 35AD called in the new Income Tax Act 2025?

Section 46: optional deduction of the whole capital expenditure of a specified business.

What is section 35AD called in the new Income-tax Act, 2025?

Section 35AD of the Income-tax Act, 1961 corresponds to Section 46 of the Income-tax Act, 2025, which applies from 1 April 2026 (tax year 2026-27).

What changed in section 35AD under the new Income Tax Act?

Renumbered; conditions carry over.

Is section 35AD still applicable for FY 2025-26?

Yes. Income of FY 2025-26 (AY 2026-27) and earlier years is governed by section 35AD of the 1961 Act. Section 46 of the 2025 Act applies from tax year 2026-27.

Related sections

32→33Depreciation on tangible and intangible business assets 115BAA→200Concessional 22% tax rate option for domestic companies 44AB→63Tax audit of accounts for businesses and professions above turnover limits