Sums deductible from gross profits.—The following sums shall be
deducted from the gross profits as prior charges, namely:-
(a) any amount by way of
depreciation admissible in accordance with the provisions of sub-section (1) of
section 32 of the Income-tax Act, or in accordance with the provisions of the
agricultural income-tax law, as the case may be:
Provided that
where an employer has been paying bonus to his employees under a settlement or
an award or agreement made before the 29th May, 1965, and subsisting
on that date after deducting from the gross profits notional normal
depreciation, then, the amount of depreciation to be deducted under this clause
shall, at the option of such employer (such option to be exercised once and
within one year from the date) continue to be such notional normal
depreciation;
(b) any amount by way of
[development rebate or investment
allowance or development allowance] which the employer is entitled to deduct
from his income under the income-tax Act;
(c) subject to the
provisions of section 7, any direct tax which the employer is liable to pay for
the accounting year in respect of his income, profits and gains during that
year;
(d) such further sums as
are specified in respect of the employer in the [Third
Schedule].
