The Statutory Brief

IT Act 1961 → 2025 / Section 35D

Business income

Section 35D → Section 44

Amortisation of preliminary expenses over five years

Section 35D of the old Income-tax Act, 1961 · new section 44 under the Income-tax Act, 2025

New reference Section 44

Income-tax Act, 1961Section 35D

  • One-fifth of qualifying preliminary expenses for 5 years
  • Feasibility, project report, market survey, legal costs, etc.

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

Income-tax Act, 2025Section 44

  • Same, now section 44
  • One-fifth over 5 years

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

What changed

Renumbered.

Practice notes

  • Limits on qualifying amount (% of project cost/capital employed) continue.

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 35D called in the new Income Tax Act 2025?

Section 44: preliminary expenses amortised one-fifth a year over five years.

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

Section 35D of the Income-tax Act, 1961 corresponds to Section 44 of the Income-tax Act, 2025, which applies from 1 April 2026 (tax year 2026-27).

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

Renumbered.

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

Yes. Income of FY 2025-26 (AY 2026-27) and earlier years is governed by section 35D of the 1961 Act. Section 44 of the 2025 Act applies from tax year 2026-27.

Related sections

32→33Depreciation on tangible and intangible business assets37(1)→34General deduction for business expenditure; disallowance of illegal expenses and CSR35AD→46100% deduction of capital expenditure for specified businesses (warehousing, hotels, hospitals, pipelines, etc.)