Section 33AB explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 33AB gives a tea, coffee or rubber business the lower of its NABARD deposit and 40% of business profits; section 33ABA gives a petroleum or natural gas business the lower of its Site Restoration deposit and 20%.
From the ICAI Guidance Note on Tax Audit (Revised 2026), the concluding edition under the Income-tax Act, 1961; the table reproduced below is stated as the law prevailing on 1 April 2025, applicable from A.Y. 2025-26. For tax years under the Income-tax Act, 2025 the corresponding provisions must be identified afresh, and the report becomes Form No. 26 under rule 47 of the Income-tax Rules, 2026.
Why these two sections behave differently from the rest of clause 19
Most deductions in clause 19 arise from expenditure that has been debited somewhere. These two arise from a deposit, which accounting principles put on the balance sheet. Paragraph 31.5 names them as the example of a deduction where the amount debited to the profit and loss account is nil while the amount admissible may be substantial — and requires the admissible amount to be worked out and reported anyway.
Section 33AB — tea, coffee and rubber
| Position under section 33AB | |
|---|---|
| Applicability | An assessee carrying on the business of growing and manufacturing tea, coffee or rubber in India |
| Eligible amount | (i) Amounts deposited in a special account maintained with NABARD in accordance with a scheme approved by the Tea Board, Coffee Board or Rubber Board; or (ii) amounts deposited in a deposit account opened in accordance with a scheme approved by one of those Boards with the previous approval of the Central Government |
| Timing | Deposited before the expiry of six months from the end of the previous year or before the due date for furnishing the return of income, whichever is earlier |
| Quantum | The lower of (a) the amount or aggregate deposited and (b) 40% of the profits of such business, computed under profits and gains of business or profession before making any deduction under this section |
The deposit window closes on the earlier of six months from the year end and the return due date. For a 31 March year end, six months runs to 30 September — which is also the ordinary return due date for an audited assessee, but is earlier than the 31 October date where a section 92E report is due. A deposit made in October by a transfer-pricing assessee is therefore out of time even though the return is not.
Section 33ABA — petroleum and natural gas
| Position under section 33ABA | |
|---|---|
| Applicability | An assessee carrying on a business consisting of the prospecting for, or production of, petroleum or natural gas or both in India, in relation to which the Central Government has entered into an agreement with that assessee for such business |
| Eligible amount | (i) Amounts deposited in a special account maintained with the State Bank of India in accordance with, and for the purposes specified in, a scheme approved by the Government of India in the Ministry of Petroleum and Natural Gas; or (ii) amounts deposited in a Site Restoration Account opened in accordance with, and for the purposes specified in, the scheme framed by that Ministry |
| Timing | Before the end of the previous year |
| Interest | Any amount credited to the special account or the Site Restoration Account by way of interest is deemed to be a deposit under the section |
| Quantum | The lower of (a) the amount or aggregate deposited and (b) 20% of the profits of such business, computed under profits and gains of business or profession before making any deduction under this section |
The differences that matter to the audit
| Section 33AB | Section 33ABA | |
|---|---|---|
| Depositary | NABARD | State Bank of India / Site Restoration Account |
| Approving body | Tea, Coffee or Rubber Board | Ministry of Petroleum and Natural Gas |
| Deposit deadline | Six months from year end or the return due date, whichever is earlier | Before the end of the previous year |
| Ceiling | 40% of business profits | 20% of business profits |
| Interest credited | — | Deemed to be a deposit |
Both compute the percentage on the profits of that business, under the head profits and gains of business or profession, before any deduction under the section itself — so the ceiling is calculated on the pre-deduction figure, not on the reduced one.
Where a concessional regime removes the deduction
Paragraph 31.4: a company or co-operative society paying tax under section 115BA, 115BAA, 115BAB, 115BAD or 115BAE is not entitled to claim deductions including section 33AB and 33ABA. The same applies to an individual, HUF, AOP other than a co-operative society, BOI or artificial juridical person paying tax under the default regime in section 115BAC(1A). Read clause 8a before completing the clause 19 row.
What the auditor verifies
- That the business is the eligible business — growing and manufacturing tea, coffee or rubber; or prospecting for or producing petroleum or natural gas under a Central Government agreement.
- The scheme approval — Board approval, and for the section 33AB(ii) route the previous approval of the Central Government.
- The deposit challan or bank confirmation and its date, against the applicable deadline.
- The computation of business profits on which the 40% or 20% ceiling is applied.
- For section 33ABA, that interest credited to the account has been treated as a deposit.
- Any separate audit report obtained for the deduction, and the cross-reference to it in Form No. 3CA that the TAQRB found missing.
Worked example
A company growing and manufacturing tea has business profits of Rs 4,20,00,000 before any deduction under section 33AB. Its year ends 31 March and it is also required to furnish a report under section 92E.
| Deposit | Date | Counts? |
|---|---|---|
| Rs 1,10,00,000 to the NABARD special account | 18 September | Yes — within six months |
| Rs 40,00,000 further deposit | 9 October | No — after 30 September, which is the earlier of the two dates |
Ceiling = 40% × Rs 4,20,00,000 = Rs 1,68,00,000. Eligible deposit = Rs 1,10,00,000. Deduction = the lower, Rs 1,10,00,000. Clause 19 reports nil debited and Rs 1,10,00,000 admissible.
Audit checklist
- Confirm eligibility of the business, and for section 33ABA the Central Government agreement.
- Obtain the approved scheme and, where relevant, the Central Government's previous approval.
- Test the deposit date against the correct deadline — the two sections differ.
- Compute the ceiling on pre-deduction business profits of that business only.
- Treat interest credited to a section 33ABA account as a deposit.
- Report the admissible amount even though nothing was debited.
- Check clause 8a for a concessional regime that bars the deduction.
- Cross-refer any separate audit report in Form No. 3CA.
Common mistakes
- Leaving the clause 19 row blank because nothing was debited.
- Using the return due date where six months from the year end is earlier.
- Applying the ceiling to total business profits rather than to that business.
- Omitting interest credited from the section 33ABA deposit.
- Claiming the deduction under a concessional regime.