Section 33A — Development allowance

Function in the statutory architecture

Section 33A allowed a development allowance to an assessee carrying on the business of growing and manufacturing tea in India, for planting tea bushes on land in India owned by it. The allowance was fifty per cent of the actual cost of planting on land never planted with tea or previously abandoned, and thirty per cent for replanting in place of dead or permanently useless bushes. It was allowed in two stages, by reference to the cost incurred up to the year after the land was prepared and then in the third succeeding year on the balance.

For new planting, the work had to start after 31-3-1965 and be completed before 1-4-1990. For replacement planting, it had to be completed before 1-4-1970. An assessee with leasehold or other occupancy rights is treated as owner.

Operative consequences

• Unabsorbed allowance was carried forward for not more than eight assessment years after the year in which it first became allowable.
• Seventy-five per cent of the allowance had to be credited to a reserve to be used for the business within eight years, and not for dividends, remittance abroad or assets outside India.
• If the land was sold or transferred within eight years from the end of the year of the deduction, the allowance was deemed wrongly made and s. 155(5A) applied, except for transfers to Government bodies or in an amalgamation or succession.

Status

The section remains printed in the 1961 Act but has no application for AY 2026-27, since every planting window it allows closed by 1-4-1990. The Finance Act, 2026 does not amend this section.

The 1961 Act governs AY 2026-27 and earlier assessment years; the Income-tax Act, 2025 governs tax year 2026-27 onwards. For this subject there is no provision in the Income-tax Act, 2025.