Chapter IV - Computation of Total Income
Section 47
Section 47: expenditure on agricultural extension and skill development projects
Section 47 allows a deduction for expenditure incurred on two specific kinds of Board-notified projects: an agricultural extension project (available to any assessee) and a skill development project (available to a company), provided the project has been notified by the Board as per its guidelines.
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This article is for general information. Refer to the Income-tax Act, 2025 as amended by the Finance Act, 2026 and the Taxation and Other Laws (Amendment) Act, 2026 for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
(1) Any expenditure (excluding cost of any land or building) incurred, on— (a) agricultural extension project by any assessee; or (b) any skill development project by a company, shall be allowed as a deduction, in the tax year in which such expenditure is incurred provided such project is notified by the Board as per the guidelines issued by it.
(2) If a deduction under this section is claimed and allowed for any tax year in respect of any expenditure referred to in sub-section (1), deduction shall not be allowed for such expenditure under any other provision of this Act for the same or any other tax year.
Introduction
This relief is project-specific. It requires a Board-notified agricultural extension or skill-development project and excludes land or building cost from the deductible base.
Key takeaways
Notified projects
Expenditure other than land or building cost on a Board-notified agricultural extension project, or a company’s skill-development project, is deductible in the year incurred.
No duplicate claim
Expenditure deducted here cannot be deducted again under another provision.
What is deductible
Section 47(1) allows a deduction, in the tax year the expenditure is incurred, for expenditure (excluding the cost of any land or building) on: (a) an agricultural extension project, by any assessee; or (b) a skill development project, by a company - provided the relevant project has been notified by the Board as per its issued guidelines.
No double deduction
Section 47(2) provides that once a deduction under this section is claimed and allowed for any tax year in respect of specific expenditure, no deduction for that same expenditure can be claimed under any other provision of the Act, for the same or any other tax year.
Evidence of notification and spend
Match the taxpayer to the route: any eligible assessee for agricultural extension, but a company for the skill-development route.
Retain the project's Board notification and itemise expenditure incurred in the year, excluding land and building costs; prevent a second deduction for the same amount.
Step-by-step flow for applying Section 47
- 1
Is the project an agricultural extension project (any assessee) or a skill development project (company only)?
- No: Section 47 does not apply.
- Yes: Go to the next step.
- 2
Is the project notified by the Board under its guidelines?
- No: No deduction under Section 47.
- Yes: Go to the next step.
- 3
Exclude the cost of any land or building
- 4
Claim the remaining expenditure in the tax year in which it is incurred
- 5
Do not claim the same expenditure under any other provision in any tax year (Section 47(2))
Practical checklist
Do
- Verify the exact project notification and the taxpayer category before claiming.
- Reconcile each invoice to the project and remove land or building cost.
Avoid
- Do not claim an unnotified project under this section.
- Do not deduct the same project expense elsewhere after claiming here.
Illustrative example
Worked example: a company's notified skill development project
Hypothetical facts (illustration only, not a real taxpayer): A company spends ₹50,00,000 in a tax year on a skill development project notified by the Board. Of this, ₹12,00,000 is for a training building.
Eligibility
A company running a notified skill development project qualifies under Section 47(1)(b).
Exclude building cost
₹12,00,000 for the building is excluded.
Deduction
₹50,00,000 - ₹12,00,000 = ₹38,00,000, allowed in the year incurred.
No double claim
The ₹38,00,000 cannot be claimed again under any other provision. The building cost is examined under the other provisions of the Act.
Outcome
- Deduction under Section 47 is ₹38,00,000.
- Keep the Board notification and project expense records.
Glossary
- Board-notified project
- An agricultural extension or skill-development project notified under the Board's Section 47 guidelines.
Frequently asked questions
Who can claim a deduction for an agricultural extension project?
Any assessee - it is not restricted to companies - provided the project has been notified by the Board as per its guidelines.
Who can claim a deduction for a skill development project?
Only a company, and only if the specific skill development project has been notified by the Board as per its guidelines.
Does this deduction cover the cost of land or a building used for the project?
No - Section 47(1) expressly excludes the cost of any land or building from the deductible expenditure.
Need help applying this provision to your situation?
Talk to our tax team about agricultural extension and skill development deductionsLast updated 9 October 2026