Section 31 of the Income-tax Act, 1961: Repairs and Insurance of Machinery, Plant and Furniture
Section 31 allowed businesses and professionals to deduct eligible current repairs and insurance premiums for machinery, plant and furniture used in their operations. From 1 April 2026, the corresponding provisions are contained in Section 28 of the Income-tax Act, 2025.
Section 31 of the Income-tax Act, 1961
Under the heading Repairs and insurance of machinery, plant and furniture, Section 31 provided deductions in respect of machinery, plant or furniture used for the purposes of business or profession:
- Section 31(i): Amounts paid on account of current repairs to those assets.
- Section 31(ii): Insurance premiums paid against the risk of damage or destruction of those assets.
Explanation to Section 31: Expenditure in the nature of capital expenditure is excluded from the meaning of current repairs. This Explanation was inserted by the Finance Act, 2003 with effect from 1 April 2004.
Read the official Section 31 text and the Income-tax Act, 1961 as amended by the Finance Act, 2025.
Current law: Section 28 of the Income-tax Act, 2025
The Income-tax Act, 2025 consolidates provisions relating to premises, machinery, plant and furniture. For the subject previously covered by Section 31, the main corresponding rules are:
| Provision | What it allows or requires |
|---|---|
| Section 28(1)(a) | Insurance premiums paid against the risk of damage or destruction of qualifying business or professional assets. |
| Section 28(1)(f) | Current repairs to machinery, plant or furniture, excluding expenditure in the nature of capital expenditure. |
| Section 28(2) | Where an asset is partly or not exclusively used for business or profession, the deduction is restricted to the fair proportionate part determined by the Assessing Officer with regard to its business use. |
The provision is available in the official Section 28 text and the Income-tax Act, 2025 as amended by the Finance Act, 2026.
What are current repairs?
Current repairs generally means expenditure incurred to preserve, maintain or restore an existing asset to efficient working condition, rather than to acquire a new asset or bring into existence a materially different capital asset. The nature and effect of the work matter more than the description used on an invoice.
Capital expenditure generally relates to acquiring, creating or substantially improving a capital asset. Such expenditure is not deductible as current repairs under Section 31 or Section 28(1)(f); its separate tax treatment, including any applicable depreciation, must be considered.
Examples of repairs and insurance expenses
| Expense | Indicative treatment |
|---|---|
| Routine servicing and replacement of worn machine components | May qualify as current repairs if the work maintains an existing asset and is not capital in nature. |
| Repairing existing office furniture | Generally eligible where it restores or maintains the furniture. |
| Insurance premium against accidental damage to business machinery | Generally eligible where the policy covers qualifying business assets. |
| Purchase of a new machine or substantial capital upgrade | Not a current-repairs deduction; consider applicable capitalisation and depreciation rules. |
| Repair of equipment used partly for private purposes | Only the appropriate business-use proportion is deductible, subject to the applicable provision. |
These are illustrations, not automatic classifications. The actual treatment depends on the work performed, asset, business use, accounting records and applicable law.
Documentation for claiming the deduction
Businesses should retain repair invoices, descriptions of work, payment records, equipment details, insurance policy schedules and premium receipts. For mixed-use assets, keep a reasonable basis for determining the business-use portion. Supporting records help distinguish maintenance expenditure from capital improvements.
Related provisions
Under the 1961 Act, Section 30 addressed premises-related expenses, while Section 32 dealt with depreciation. Under the 2025 Act, the relevant repair and insurance provisions are consolidated in Section 28.
Official sources and further reading
- Income Tax Department: Section 31, Income-tax Act, 1961
- Income Tax Department: Section 28, Income-tax Act, 2025
- Income Tax Department: Scope and transition to the new Act
This article is general legal and tax information. The applicable tax year, facts and current statutory amendments should be checked before filing a return or taking a tax position.