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Microlesson · 5-min read

Repairs and Insurance of Plant, Machinery & Furniture — Section 31

# Section 31 — Repairs and Insurance of Plant, Machinery and Furniture

Section 31 is the mirror image of Section 30, but for plant, machinery, and furniture used for the purpose of business or profession.

## Items Covered

ExpenseDeduction Status
Repairs — Revenue Nature (e.g., replacing belts, oiling, minor part replacement)Allowed
Repairs — Capital Nature (e.g., overhaul that enhances capacity / extends life beyond original)NOT Allowed — capitalised to the asset's cost (depreciation under Section 32)
Insurance Premium against risk of damage / destructionAllowed

## Important Notes

1. Rent on plant & machinery / furniture is NOT covered under Section 31 — it is allowed as a general business expenditure under Section 37(1).

2. The asset must be used for the business or profession — passive use (kept ready for use) suffices in many situations, paralleling depreciation principles.

3. Current repairs only — extensive repairs that enhance the asset are capitalised.

## Difference between Section 30 and Section 31

ItemSection 30 (Building)Section 31 (P&M, Furniture)
RentAllowedNOT covered (allowed under Section 37)
Municipal tax / ratesAllowedNOT applicable
Revenue repairsAllowedAllowed
Capital repairsNot allowed (capitalised)Not allowed (capitalised)
InsuranceAllowedAllowed

Worked example

### Example 1

Question: A manufacturing concern incurred the following expenses on its plant and machinery during PY 2025-26:

  • Routine servicing & oiling: ₹50,000
  • Replacement of a major worn-out engine that enhanced capacity by 20%: ₹6,00,000
  • Insurance premium for the plant: ₹30,000
  • Rent paid for hired machinery: ₹1,20,000

Compute deduction.

Solution:

  • Routine servicing ₹50,000 → Allowed under Section 31 (current repairs)
  • Engine replacement ₹6,00,000 → Capital in nature (enhances capacity) — NOT allowed under Section 31; capitalised and depreciation allowed under Section 32
  • Insurance ₹30,000 → Allowed under Section 31
  • Rent for hired machinery ₹1,20,000 → NOT covered by Section 31; allowed under Section 37(1) as general business expense

Deduction under Section 31 = ₹80,000 (plus ₹1,20,000 under Section 37)

⚠️ Common exam mistakes

  • Claiming rent of P&M under Section 31 — it falls under Section 37(1).
  • Treating major upgrades that enhance asset capacity as 'current repairs'.
  • Forgetting that capitalised repairs still get tax relief via depreciation in subsequent years.
Bare-Act text Section 31 · Income-tax Act, 1961 · click to expand
Section 31: In respect of repairs and insurance of machinery, plant or furniture used for the purposes of the business or profession, the following deductions shall be allowed — (i) the amount paid on account of current repairs thereto; (ii) the amount of any premium paid in respect of insurance against risk of damage or destruction thereof.
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