Sections 47 to 50 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.
Four short sections follow section 46. Section 47 allows a deduction for approved agricultural extension and skill development projects. Section 48 gives a deduction for deposits in tea, coffee and rubber development accounts, worked out under Schedule IX. Section 49 does the same for a Site Restoration Fund in petroleum and natural gas, under Schedule X. Section 50 allows a trade or professional association to deduct the shortfall of members' contributions over its expenditure. This article explains them as per the Income-tax Act, 2025 (30 of 2025) as amended by the Finance Act, 2026.
Section 47: expenditure (not land or building) on an agricultural extension project by any assessee, or a skill development project by a company, is deductible in the year incurred if the Board has notified the project. Section 48 and 49: deposits into the tea, coffee or rubber accounts, and into the site restoration account, are deductible as the Schedule computes, and withdrawals are charged to tax. Section 50: a specified association may deduct the amount by which members' receipts fall short of its expenditure for their common interest, up to 50 per cent of total income before the deduction.
Where these sections sit
These four sections are in Part D of Chapter IV, after section 46 on specified businesses, in the article on section 46, and before section 51, in the article on section 51 and Schedule XII. The Schedules that sections 48 and 49 use are explained in our posts on Schedule IX and Schedule X, the Site Restoration Fund; they are not re-explained here. If your business is in one of these sectors, our tax planning advisory team can help.
Section 47: agricultural extension and skill development
Section 47(1)
Any expenditure (excluding the cost of any land or building) incurred on:
- (a) an agricultural extension project by any assessee; or
- (b) any skill development project by a company,
is allowed as a deduction in the tax year in which it is incurred, provided the project is notified by the Board as per the guidelines issued by it. What has been notified is not in the text consulted.
Section 47(2)
If a deduction under section 47 is claimed and allowed for any tax year, no deduction is allowed for that expenditure under any other provision of the Act, for the same or any other tax year.
Section 48: tea, coffee and rubber development accounts
| Sub-section | Rule |
|---|---|
| (1) | An assessee carrying on business of growing and manufacturing tea, coffee or rubber in India is allowed a deduction on the basis of deposits into the special account or deposit account, computed as per Schedule IX |
| (2) | Any amount withdrawn, utilised or released from those accounts at closure or otherwise is charged to tax as per Schedule IX |
| (3) | Where an asset acquired as per the special scheme or deposit scheme in Schedule IX is sold or otherwise transferred in any tax year, it is charged to tax in accordance with the Schedule |
The section itself prints no percentage or limit; the computation is in Schedule IX.
Section 49: Site Restoration Fund
| Sub-section | Rule |
|---|---|
| (1) | An assessee carrying on a business of prospecting, extracting or producing petroleum or natural gas, or both, in India, and having an agreement with the Central Government for this business, is allowed a deduction on the basis of deposit to the special account or site restoration account, computed as per Schedule X |
| (2) | Any amount withdrawn or transferred from those accounts at closure or otherwise is charged to tax in the year in which it is transferred or withdrawn, as per Schedule X |
| (3) | Where an asset acquired as per the special scheme or deposit scheme in Schedule X is sold or otherwise transferred in any tax year, it is charged to tax in accordance with the Schedule |
Section 50: trade, professional or similar associations
Section 50(1): the deduction
"Irrespective of anything to the contrary" in the Act, if during the tax year the amount received by a specified association from its members falls short of the expenditure incurred by it solely for the protection or advancement of the common interest of its members, the shortfall is allowed as a deduction from its income under the head "Profits and gains of business or profession". The remaining amount, if any, is allowed as deduction from its income under any other head.
Section 50(2): definitions
- (a) Specified association: any trade, professional or similar association, not covered in Schedule III (Table: serial number 24), whose income or part of it is not distributed to its members (other than as grants to associations or institutions affiliated to it).
- (b) Amount received from members: includes subscription or otherwise, and excludes any remuneration received by the association for rendering specific services to such members.
- (c) Expenditure: excludes (i) expenditure deductible under any other provision of the Act, and (ii) any capital expenditure.
Section 50(3) and (4): losses and the cap
- (3) The effect of other provisions on carry forward and set off of brought forward losses or allowances is given before the deduction under sub-section (1).
- (4) The maximum allowable deduction under section 50 shall not exceed 50 per cent of the total income as computed before allowing the deduction.
Example: a traders' association
Mandi Traders' Association (an invented specified association) receives Rs. 4,00,000 in subscriptions from members in the tax year. It also earns fees for a specific testing service rendered to members, which are excluded from the amount received. It spends Rs. 6,50,000 solely for the common interest of members, none of it capital expenditure and none deductible under another provision. The shortfall is 6,50,000 minus 4,00,000 = Rs. 2,50,000. Its total income as computed before the section 50 deduction, after giving effect to loss and allowance carry forwards, is Rs. 4,00,000. The cap is 50 per cent of that: 4,00,000 x 50% = Rs. 2,00,000. The deduction is therefore limited to Rs. 2,00,000, although the shortfall is Rs. 2,50,000. The text does not say how the balance of Rs. 50,000 is treated.
Example: skill development by a company
Pragati Textiles Ltd (invented) spends Rs. 3,00,000 on a skill development project that the Board has notified, excluding the cost of land or building. It is allowed in the tax year it is incurred under section 47(1)(b) and cannot be claimed again elsewhere under section 47(2). An individual taxpayer would not qualify under clause (b), since it is limited to a company; but clause (a), agricultural extension, is open to any assessee.
Need help with sector-specific deductions?
Sections 47 to 50 depend on notifications, scheme accounts and the Schedules. To check whether your project or fund qualifies, see our tax planning advisory service.
Key takeaways
- Section 47: agricultural extension (any assessee) and skill development (company) projects notified by the Board; land and buildings excluded; no double deduction.
- Section 48: tea, coffee and rubber growers and manufacturers in India deduct deposits as Schedule IX computes; withdrawals and asset sales are taxed as the Schedule says.
- Section 49: petroleum and natural gas businesses with a Central Government agreement deduct deposits to the site restoration account as Schedule X computes.
- Section 50: a specified association deducts the shortfall of member receipts against common-interest expenditure, capped at 50 per cent of total income before the deduction.
- Notifications and the Schedules' detail are outside the section text.
Read next
- Section 46: capital expenditure of specified business
- Section 51 and Schedule XII: amortisation of expenditure for prospecting minerals
- Section 45: scientific research expenditure
- Section 26: business income
Disclaimer: Based on the Income-tax Act, 2025 (30 of 2025) as amended by the Finance Act, 2026, as consulted on 2 October 2026. It explains the words of the Act only; the Income-tax Rules, 2026, notifications, circulars, later amendments and the way the tax authorities and courts apply these provisions should be checked. This article is general information, not legal advice; check the official text before acting.