Treatment of Loss of animals under PGBP
In case any animals are used for the purposes of the business or profession, their cost can be claimed as deduction while calculating the taxable income for the purpose of income tax return. This is in accordance with Section 32(1)(j) of the Income Tax Bill, 2025.
According to this section, the most important condition for claiming deduction is that the animals must be used in the business or profession otherwise than as stock-in-trade. In case, the animals are used as stock-in-trade, there treatment will be as "Inventories" in lines with the ICDS. Following are the points to be considered while claiming deduction:
- Deduction shall be allowed where animals are not held as stock-in-trade.
- Deduction shall be allowed only when animals are used for the purposes of business or profession in any manner other than stock-in-trade.
- Deduction shall be allowed only when the animal has died or become permanently useless.
- Quantum of Deduction = Cost of animals used for business or profession- Amount realised from carcasses or animals, where such animal have died or permanently useless.
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