Every business uses machinery, plant, or furniture — and keeping them running costs money. Section 31 simply says: if you spend money on current repairs or insurance premiums for these assets, you can deduct the full amount from your business income. No limits, no percentages — just actual expenditure, fully allowed.
The key word here is 'current repairs'. Think of it as maintenance that keeps the asset in its existing working condition — oiling a machine, fixing a broken lathe, repainting office furniture. The moment your repair improves or extends the life of the asset — say, you upgrade a machine's engine to a more powerful one — it crosses into capital expenditure territory. That is explicitly excluded by the Explanation to this section. Capital expenditure goes to the asset account and earns depreciation under Section 32, not a direct deduction under Section 31.
The second limb covers insurance premiums paid to protect machinery, plant, or furniture against damage or destruction — fire insurance on factory equipment, for example. The premium must relate to a risk of damage or destruction, so a general liability policy wouldn't qualify here. Also note: the asset must be used for the purposes of the business or profession — idle assets or personal-use assets don't qualify. If Mr. Sharma runs a manufacturing unit and also has machinery lying unused in his godown, only the insurance on the working machinery is deductible. This section is often tested in contrast with Section 30 (repairs of buildings) and Section 32 (depreciation) — examiners love asking you to classify expenditure correctly across these three sections. This is asked frequently as a 4-mark question requiring classification of given expenses.