Income-tax Rules, 1962 | Rule 5AA

Rule 5AA: Prescribed Authority for Investment Allowance

Rule 5AA identifies the government authority designated for the purposes of section 32A(2B) of the Income-tax Act, 1961, a provision concerning investment allowance.

Historical provision: Section 32A and its related investment allowance regime concern earlier assessment periods. This page explains the text and context of Rule 5AA; it should not be read as establishing a new investment allowance for current investments. For present-year claims, check the law applicable to the relevant tax year.

What does Rule 5AA provide?

The rule is titled Prescribed authority for investment allowance. Its operative provision is short and specific:

Rule 5AA. For the purposes of sub-section (2B) of section 32A, the "prescribed authority" shall be the Secretary, Department of Scientific and Industrial Research, Government of India.

Who is the prescribed authority?

The designated authority is the Secretary, Department of Scientific and Industrial Research (DSIR), Government of India. The original page contained a printed amendment footnote number before the department name; that editorial marker is not part of the substantive designation.

Purpose and legal context

Section 32A of the Income-tax Act, 1961 dealt with investment allowance in specified circumstances. Sub-section (2B) referred to a prescribed authority, and Rule 5AA supplied the identity of that authority. The rule does not, by itself, prescribe a deduction rate, confer approval, or establish that every investment qualifies for an allowance.

Where an old assessment, reassessment, appeal, or archived tax record invokes section 32A(2B), the authority specified in Rule 5AA may be relevant to interpreting the applicable historical requirements. The precise entitlement depends on the statutory text and amendments effective for the assessment year concerned.

Relevance to tax compliance in 2026

India's income-tax framework changed with the Income-tax Act, 2025 taking effect from 1 April 2026. Historical references to section 32A and Rule 5AA of the 1962 Rules must therefore be distinguished from provisions governing current tax years. Do not assume that a historical investment allowance remains available under the new framework.

For legacy matters, retain the assessment-year-specific law, relevant notifications, and any correspondence with the prescribed authority. For current deductions and depreciation, consult the provisions and rules applicable to the relevant tax year.

For the broader treatment of business assets and deductions, see Rule 5 on depreciation and Rule 5A on the accountant's report for additional depreciation. These provisions address different requirements and should not be confused with Rule 5AA.

Frequently asked questions

What is Rule 5AA of the Income-tax Rules, 1962?

It specifies the prescribed authority for the purposes of section 32A(2B) of the Income-tax Act, 1961.

Which authority is named under Rule 5AA?

The Secretary, Department of Scientific and Industrial Research, Government of India.

Does Rule 5AA itself grant an investment allowance?

No. It identifies an authority; eligibility for any historical allowance is determined by the substantive law applicable to the relevant assessment year.