Section 35CCC Income Tax Act: Deduction for Agricultural Extension Projects

Updated: 24 October 2026 | Indian income-tax law

Section 35CCC of the Income-tax Act, 1961 allowed a deduction for expenditure on qualifying, notified agricultural extension projects. The deduction was originally 150% of eligible expenditure, but became 100% from assessment year 2021-22. From 1 April 2026, the corresponding provision is Section 47(1)(a) of the Income-tax Act, 2025.

Meaning and scope of agricultural extension expenditure

An agricultural extension project is a structured initiative to provide farmers with training, education and guidance. For the statutory deduction, ordinary business expenditure alone is insufficient: the project must meet applicable notification and compliance requirements. CBDT means the Central Board of Direct Taxes; an assessee is a person whose income or other sum is assessable under the income-tax law.

Deduction rates and transition

Example: Where qualifying expenditure is Rs. 10 lakh, a 100% deduction equals Rs. 10 lakh, subject to project notification, statutory conditions and the applicable tax regime. A 150% deduction, where historically applicable, would equal Rs. 15 lakh.

Eligibility, approval and record-keeping

Under the 1961 Act, the project needed CBDT notification in accordance with the prescribed guidelines. Rule 6AAD of the Income-tax Rules, 1962 set out notification and approval procedures, including training, education and guidance for farmers, Ministry of Agriculture approval, and the prescribed project expenditure threshold. Rule 6AAE prescribed conditions including separate accounts, audit and restrictions concerning beneficiary payments and reimbursed expenditure.

1. Identify the qualifying agricultural extension project and obtain the approvals and notification required for the relevant period.
2. Keep evidence of eligible expenses, project activities, notification validity, and any reimbursements.
3. Maintain separate project records and comply with applicable audit and reporting conditions.
4. Do not claim the same expenditure under another income-tax deduction.

Under the 2025 Act, Section 47(1) expressly excludes the cost of any land or building and requires Board notification under its guidelines. Check the current rules for the relevant tax year rather than automatically applying an older form or procedural deadline.

Explanation of the statutory provisions

Section 35CCC(1): eligible expenditure

The 1961 Act allowed a deduction for expenditure on a notified agricultural extension project. The Finance Act, 2016 amendment reduced the multiplier to one times the expenditure from assessment year 2021-22.

Section 35CCC(2): prohibition on duplicate deductions

Once the expenditure is claimed and allowed under Section 35CCC, the same expenditure cannot also be deducted under another provision of the 1961 Act for the same or another assessment year.

Section 47 of the Income-tax Act, 2025

Section 47 combines the treatment of agricultural extension projects and qualifying skill development projects. Sub-section (1)(a) applies to agricultural extension projects by any assessee, while sub-section (1)(b) addresses qualifying skill development projects by companies. Sub-section (2) prevents double deductions.

Official legislation and reference links

• Income Tax Department: Section 35CCC (1961 Act)
• Income Tax Department: Income-tax Act, 2025 (official PDF), Section 47
• Income Tax Department: Finance Act, 2012, Section 10 (original insertion)
• Income Tax Department: e-Filing portal

Section 35CCC: original statutory text and amendment notes

The following material is preserved from the original webpage. Its provisions apply according to the relevant assessment year and subsequent legislation.

1(1) Where an assessee incurs any expenditure on agricultural extension project notified by the Board in this behalf in accordance with the guidelines as may be prescribed, then, there shall be allowed a deduction of a sum equal to one and one-half times of such expenditure.

2 Provided that for the assessment year beginning on or after the 1st day of April, 2021, the provisions of this sub-section shall have effect as if for the words "a sum equal to one and one-half times of", the words "a sum equal to" had been substituted.

(2) Where a deduction under this section is claimed and allowed for any assessment year in respect of any expenditure referred to in sub-section (1), deduction shall not be allowed in respect of such expenditure under any other provisions of this Act for the same or any other assessment year.
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1. Ins. by Act 23 of 2012, s. 10 (w.e.f. 1-4-2013).

2. Ins. by Act 28 of 2016, s. 19 (w.e.f. 1-4-2017).

2. Ins. by Act 28 of 2016, s. 19 (w.e.f. 1-4-2017).

Frequently asked questions

This article is general legal information. Specific deductions depend on the applicable year, notification, compliance and tax regime.