In order to promote reinvestment of business profits in areas where massive capital input is required for socio-economic development, a tax incentive has been provided under Section 35AC of the Income Tax Act, 1961 allowing for full deduction of the entire amount paid by a taxpayer carrying on a business or profession for financing projects or schemes promoting social and economic welfare. For aforesaid purpose the Central Government has constituted this Committee with the following functions:
- To approve associations and institutions for the purpose of carrying out any eligible project or scheme; and
- To recommend to the Central Government projects and scheme of any company including a public sector company, a local authority or an approved association or institution, for being notified as eligible projects or scheme.
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