Finance Act, 1988

Chapter V

Capital Allowances

Amendment of section 251 (initial allowances for machinery and plant) of Income Tax Act, 1967.

43.Section 251 (as amended by section 20 of the Finance Act, 1985 ) of the Income Tax Act, 1967 , is hereby amended—

(a) by the insertion in subsection (4), after paragraph (b), of the following paragraph:

“(bb) (i) in relation to capital expenditure incurred on or after the 1st day of April, 1988, and before the 1st day of April, 1989, as if ‘three-fourths’ were substituted for ‘one-fifth’ in subsection (1), and

(ii) in relation to capital expenditure incurred on or after the 1st day of April, 1989, and before the 1st day of April, 1991, as if ‘one-half’ were substituted for ‘one-fifth’ in subsection (1).”,

and

(b) by the insertion after subsection (6) of the following subsection:

“(7) Where an allowance in respect of capital expenditure incurred on or after the 1st day of April, 1988, on the provision of new machinery or plant is made under this section, section 11 of the Finance Act, 1967 , and section 26 of the Finance Act, 1971 , shall not have effect in relation to an allowance which falls to be made under section 241 of the Income Tax Act, 1967 , for wear and tear of the said machinery or plant.”.