## Family Planning Expenditure — Sec. 36(1)(ix)

A special incentive provision for Companies (not other assessees) that promote family planning among their employees.

### Scope

Deduction is available only to Companies — not to individuals, firms, LLPs, HUFs, etc.

### Treatment by Nature

Nature of Expenditure	Deduction
Revenue	100% deduction in the year incurred
Capital	Allowed in 5 equal installments over 5 years (starting from year of incurrence)

### Unabsorbed Expenditure

If the company has insufficient profits to absorb the family planning expenditure (capital portion), the unabsorbed amount can be carried forward and set off in the same manner as unabsorbed depreciation — i.e., indefinitely, against any head of income (subject to standard rules).

Worked example

### Example 1

Example: ABC Ltd. (a company) incurs the following on family planning of employees in P.Y. 2025-26:

Revenue expenditure (awareness camps): ₹5,00,000 → Fully allowed in P.Y. 25-26
Capital expenditure (construction of a clinic): ₹10,00,000 → ₹2,00,000 allowed in each of 5 years starting P.Y. 25-26

If in P.Y. 25-26 profits are only ₹1,00,000, the unabsorbed ₹1,00,000 (of the ₹2,00,000 capital installment) can be carried forward like unabsorbed depreciation.

⚠️ Common exam mistakes

Allowing this deduction to non-companies — it is restricted to companies only.
Writing off capital expenditure fully in year one — capital portion must be spread over 5 years.
Treating unabsorbed family planning expenditure like business loss (8-year limit) — it follows unabsorbed depreciation rules (indefinite carry forward).

Bare-Act text Section 36(1)(ix) · Income-tax Act, 1961 · click to expand

Section 36(1)(ix): In respect of any expenditure bona fide incurred by a company for the purpose of promoting family planning amongst its employees... Provided that where such expenditure or any part thereof is of a capital nature, one-fifth of such expenditure shall be deducted for the previous year in which it was incurred; and the balance thereof shall be deducted in equal installments for each of the four immediately succeeding previous years.

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Expenditure on Promotion of Family Planning [Sec. 36(1)(ix)]

Worked example

⚠️ Common exam mistakes