Section 24: Annual allowance

24. Annual allowance (1) Subject to the other provisions of this section, where, in an income year, a person has incurred capital expenditure on— (a) the acquisition, construction or extension of any— (i) industrial premises; (ii) clinics; (iii) shops and shopping malls; (iv) offices and showrooms; (v) restaurants; or (vi) entertainment premises; (b) the acquisition of plant or machinery; (c) agricultural improvement on agricultural land; (d) scientific research; (e) the setting up of golf courses; (ea) the acquisition of patents; or (f) the acquisition or improvement of any other item of a capital nature which is subject to depreciation under the normal accounting principles, [Issue 7] I5 – 24 Revised Laws of Mauritius he shall be allowed a deduction of the capital expenditure so incurred by way of an annual allowance in that income year and in each of the succeeding years at such rate as may be prescribed. (2) — (3) No annual allowance shall be allowed under this section unless the expenditure is incurred exclusively in the production of gross income. (4) (a) The total amount of allowance claimed under this section shall not exceed, in the aggregate— (i) in the case of a motor car, 3 million rupees; (ii) in any other case, the amount of the capital expenditure incurred. (b) Paragraph (a) (i) shall not apply to a person carrying on the business of tour operator and car rental. (5) Subject to subsection (6), where, in an income year, a person sells or otherwise transfers an asset in respect of which an allowance has been allowed, under this section, at a price or for a consideration— (a) in excess of the amount to which the value of the asset has been reduced by the allowance, the excess to the extent of the amount of the allowance granted, shall be deemed to be the gross income of the person in that income year; or (b) which is less than the amount to which the value of the asset has been reduced by the allowance, the difference shall be allowed as a deduction from the gross income of the person in that income year. (6) Where a person sells or otherwise transfers plant, machinery or industrial premises to a relative or to a related company and the plant, machinery or industrial premises sold or transferred is used by the relative or the related company for the production of gross income, the sale or transfer shall, unless the Director-General directs otherwise, be deemed to have been made at a price equal to the base value of the plant, machinery or industrial premises at the date of sale or transfer. (7) Notwithstanding this Act, where a company has invested 60 million rupees or more or at least 20 per cent of the stated capital of a spinning factory, whichever is the higher, during the years 2003 to 2008, it shall be allowed an investment tax credit by way of deduction from its tax liability as follows— (a) 15 per cent of the investment over 4 years; or (b) 10 per cent over 6 years, as from the year the investment was made, less any investment tax credit it has been allowed in the past in respect of the same investment. I5 – 25 [Issue 9] Income Tax Act (8) Notwithstanding this Act, where a company has invested 10 million rupees or more or at least 20 per cent of the stated capital, whichever is the higher, of a weaving, dyeing or knitting of fabrics factory during the years 2003 to 2008, it shall be allowed an investment tax credit by way of deduction from its tax liability as follows— (a) 15 per cent of the investment over 4 years; tax credit it has been allowed in the past in respect of the same investment. I5 – 25 [Issue 9] Income Tax Act (8) Notwithstanding this Act, where a company has invested 10 million rupees or more or at least 20 per cent of the stated capital, whichever is the higher, of a weaving, dyeing or knitting of fabrics factory during the years 2003 to 2008, it shall be allowed an investment tax credit by way of deduction from its tax liability as follows— (a) 15 per cent of the investment over 4 years; or (b) 10 per cent over 6 years, as from the year the investment was made, less any investment tax credit it has been allowed in the past in respect of the same investment. [S. 24 amended by s. 7 (c) of Act 13 of 1996 w.e.f. 1 July 1996; s. 4 (b) of Act 10 of 1998 w.e.f. 21 July 1998; s. 12 (d) of Act 25 of 2000 w.e.f. 1 July 2000; s. 11 (b) (ii) of Act 28 of 2004 w.e.f. the year of assessment commencing 1 July 2005; s. 19 (c) of Act 14 of 2005 w.e.f. 1 July 2005; s. 18 (h) (i) and (ii) of Act 15 of 2006 w.e.f. 1 July 2007; s. 9 (f) of Act 10 of 2010 w.e.f. the income year commencing 1 January 2011; s. 9 (b) of Act 26 of 2013 w.e.f. the year of assessment commencing on 1 January 2015; s. 27 (d) of Act 18 of 2016 w.e.f. 1 July 2016 in respect of the year of assessment commencing on 1 July 2016 and in respect of every subsequent year of assessment and 7 September 2016.] 25. — [S. 25 amended by s. 4 (c) of Act 10 of 1998 w.e.f. 21 July 1998; s. 10 (c) of Act 18 of 1999 w.e.f. 1 July 1999 and 31 July 1999; s. 35 (3) (b) of Act 20 of 2001 w.e.f. 17 September 2001; s. 11 (c) of Act 28 of 2004 w.e.f. 26 August 2004; s. 19 (d) of Act 14 of 2005 w.e.f. 1 July 2005; repealed by s. 18 (j) of Act 15 of 2006 w.e.f. 1 July 2007.]