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Income-tax Act, 1961 · Chapter IV: Computation of Total Income · D.—Profits and gains of business or profession

Section 31: Repairs and insurance of machinery, plant and furniture

The Income-tax Act, 1961 was repealed by the Income-tax Act, 2025 from 1 April 2026. The text is kept here because the judgments below apply it.

In plain words

This section allows business owners to deduct specific costs from their income for tax purposes. They can claim the amount paid for current repairs to machinery, plant, or furniture used in their business. They can also deduct insurance premiums paid to cover the risk of damage or destruction to these items. The text clarifies that capital expenditure is not included in the definition of current repairs.

  • Deductions apply to machinery, plant, or furniture used for business or profession purposes.
  • The amount paid for current repairs to these items is deductible.
  • Insurance premiums paid against the risk of damage or destruction are deductible.
  • Current repairs do not include any expenditure in the nature of capital expenditure.

Example: If a shop owner pays for fixing a broken shelf and buys insurance for their equipment, both amounts can be deducted from their business income.

A simplified explanation, prepared with AI assistance from the official text below and checked automatically against it for numbers and cross-references. The official text is the law and prevails over this summary. Not legal advice.

Official text

In respect of repairs and insurance of machinery, plant or furniture used for the purposes of the business or profession, the following deductions shall be allowed—

(i) the amount paid on account of current repairs thereto;

(ii) the amount of any premium paid in respect of insurance against risk of damage or destruction thereof. [Explanation.—For the removal of doubts, it is hereby declared that the amount paid on account of current repairs shall not include any expenditure in the nature of capital expenditure.]

Source: India Code (Legislative Department), the text of the Act as it stood before its repeal. Words in square brackets [ ] were inserted or substituted by later amending Acts, and *** marks words omitted by an amendment. The amendment footnotes are not reproduced here. Official text on India Code.

Supreme Court judgments citing the section 31