Applicability of Section 35CCD:
As per the provision of this section 35CCD is applicable to only to to companies.
Amount of Deduction:
- Deduction shall be allowed on account of any expenditure (not being expenditure in the nature of cost of any land or building) incurred by the company on skill development project notified by the Board in this behalf in accordance with the guidelines as may be prescribed
- An Assessee can claim 100 % of expenditure as deduction which is incurred for notified skill development project.
Some Key Points Regarding the Section 35CCD:
- The company incurring expenditure on notified skill development project are eligible for deduction. Notably, the term ‘eligible company’ is defined under rule 6AAH.
- Expenditure incurred towards the cost of land and building are not allowed as deduction.
- The company should fulfil all the guidelines prescribed under rule 6AAF and conditions prescribed under rule 6AAG
- The project should be undertaken in separate facilities in a training institute set up by Government, local authority or in an institute affiliated to National Council for Vocational Training or State Council for Vocational Training.
- For the purpose of claiming weighted deduction, an application should be submitted in Form No. 3CQ to National Skill Development Agency (NSDA).
- A copy of Form No. 3CQ should be sent to the Commissioner of Income-tax.
- Form No. 3CQ to be accompanied by detailed note on skill development project, expected expenditure and expected completion date, letter of concurrence from the training institute.
Manner of Filing Form.no 3CQ
- The eligible company needs to file an application in Form No. 3CQ to the National Skill Development Agency.
- The application should be filed in duplicate.
List of documents to be attached with the application-
- Detail note on the skill development project to be undertaken,
- Details of the expected expenditure to be incurred on the project,
- Details of an expected date of completion of the project, Concurrence letter from the training institute where the skill development project is to be undertaken
Conditions to be satisfied by the Skill Development Project–
The company needs to satisfy the following conditions prescribed under rule 6AAG for claiming deduction under section 35CCD.
- Deduction under section 35CCD is available towards expenditure incurred wholly and exclusively for undertaking the skill development project.
- The company should maintain separate books of accounts of the skill development project.
- Such books of account should be audited by the practising chartered accountant.
The audit report should contain the following details/ information-
- Auditor’s comment on the true and fair view of the books of accounts,
- Genuineness of activities of the skill development project, and
- Fulfilment of conditions prescribed under the Act and rules.
The company should furnish the following documents to the Commissioner/ Director of Income-tax-
- An audited statement of accounts of the skill development project,
- The audit report, and
- Amount of deduction claimed under section 35CCD
