The circular settles the activity question
CBDT Circular 15/2016 dated 19 May 2016 accepts that printing, or printing and publishing, amounts to manufacture or production of an article or thing for the additional-depreciation issue under section 32(1)(iia). A company carrying on that actual activity should retain the circular when documenting its manufacturing character. This does not turn every publishing-related receipt or every fixed asset into an allowable additional-depreciation claim.
Read the applicable text: CBDT Circular 15/2016 Income Tax Department transition guidance.
Document what the company actually does
Retain production flows, printing contracts, press records, job cards, paper consumption and finished-output evidence. A publishing name in the company master is not a substitute for actual activity. Distinguish an operating printing business from arrangements involving only distribution, advertising, digital services or outsourced work; uncertain facts require their own legal assessment rather than automatic extension of the circular.
Separate the activity conclusion from asset eligibility
The circular resolves the contested printing/manufacturing character. It does not replace the applicable statutory tests for the plant or machinery, its acquisition and use, the relevant year or exclusions. Prepare a machine-level register with invoices, description, ownership, installation, commissioning and use evidence, and apply the actual provisions before computing any claim. Do not derive a deduction percentage from the fraction of turnover generated by printing.
Review the company’s valid tax regime
The availability of an allowance must be tested under the company’s actual applicable provisions and valid elections. A circular recognising manufacturing character does not override a regime restriction on an allowance. This article does not determine the company’s election validity, prescribe a depreciation rate, calculate a statutory allowance or replace a period-specific regime review.
Build a reconciled candidate-asset population
Match the ledger to invoices and separate plant, building, services, advances and unresolved costs. Identify duplicates and distinguish an eligible cost conclusion from a preliminary amount awaiting evidence. A candidate cost is a preparation status, not an entitlement. The worked examples below concern the evidence and reconciliation file; they deliberately do not present the cost total as the tax deduction.
Keep the applicable period clear
This article concerns FY 2025–26 / AY 2026–27 under the 1961 Act transition framework. Preserve the circular with the company’s actual production evidence and the separately completed statutory asset, timing and regime analysis. The final computation should show the supported conclusion, not merely attach the circular to an unexplained lump-sum claim.
Six worked illustrations
All facts and amounts are fictional. Calculations illustrate the stated assumptions, not a predetermined legal outcome.
Illustrative example 1: Separate production machines
A company’s new printing-press file shows ₹40 lakh and a distinct binding-machine file ₹10 lakh, total ₹50 lakh candidate cost. Verify each asset’s statutory conditions separately. The ₹50 lakh total is not itself an additional-depreciation deduction.
Illustrative example 2: Composite acquisition file
A ₹60 lakh project extract comprises machinery ₹45 lakh and building ₹15 lakh. Keep the two populations separate rather than treating all ₹60 lakh as printing plant because the project serves a manufacturing business. Remaining eligibility and cost tests still apply.
Illustrative example 3: Duplicate asset import
One ₹30 lakh press invoice appears in two imports, giving ₹60 lakh draft additions. Removing the duplicate restores ₹30 lakh. The circular does not convert two accounting rows into two acquired machines.
Illustrative example 4: Evidence-completeness working
Candidate machine costs total ₹25 lakh, but only ₹20 lakh has reconciled invoice and commissioning support at the review date. Flag ₹5 lakh unresolved; this is a preparation gap, not a statutory rule that every missing document permanently disallows the cost.
Illustrative example 5: Mixed activity does not set a deduction ratio
A company records ₹80 lakh printing revenue and ₹20 lakh separately identified service revenue, total ₹100 lakh. Printing is 80% of this revenue population, but that ratio is not an additional-depreciation rate or automatic asset-cost allocation formula.
Illustrative example 6: Advances versus additions
Payments total ₹22 lakh: supported delivered-machine amount ₹18 lakh and ₹4 lakh outstanding as an advance for another machine. Reconcile the advance separately. Payment alone does not prove that the second machine satisfies the acquisition, ownership or use conditions for a current-year allowance.
Ten-step verification table
| Step | Action | Evidence |
|---|---|---|
| 1 | Fix the period | FY 2025–26 / AY 2026–27 and applicable-law note. |
| 2 | Identify actual activity | Production and business-process evidence. |
| 3 | Retain the accepted authority | Circular 15/2016 and reasoned activity conclusion. |
| 4 | Separate non-printing activities | Contracts and income-stream mapping. |
| 5 | Create machine-level records | Invoices and unique asset IDs. |
| 6 | Reconcile ownership and cost | Books, agreements and payment evidence. |
| 7 | Verify installation and use facts | Commissioning and operating records. |
| 8 | Apply remaining statutory conditions | Eligibility, exclusions and timing analysis. |
| 9 | Review valid tax regime | Actual election and allowance availability. |
| 10 | Complete the computation bridge | No duplicate cost or unsupported lump-sum claim. |
Sixteen practitioner FAQs
1. What activity position does the circular accept?
Printing, or printing and publishing, amounts to manufacture or production for the stated additional-depreciation issue.
2. Is a publishing company name enough?
No. Establish the company’s actual operations.
3. Does it automatically cover distribution-only activity?
No. Do not extend the accepted facts without separate analysis.
4. Does it determine digital-service classification?
No blanket conclusion on digital services is supplied by this circular.
5. What production evidence is useful?
Job cards, press operations, inputs, contracts and finished-output records.
6. Are all project costs machinery?
No. Separate building, machinery, services and other items.
7. Does the circular establish every asset’s eligibility?
No. Apply the remaining statutory conditions.
8. Can printing turnover percentage be used as the allowance rate?
No. Revenue mix is not the statutory depreciation rate.
9. Does the article prescribe a rate?
No. It is an activity and evidence-file guide, not an allowance calculator.
10. Does manufacturing character override a restrictive tax regime?
No. Check actual applicable provisions and valid elections separately.
11. Is a candidate cost a claimed deduction?
No. It is a preliminary population requiring legal and factual review.
12. Does payment prove current-year use?
No. Trace acquisition, ownership and use evidence.
13. Can an advance be mixed into delivered machinery automatically?
No. Reconcile it separately on its actual status.
14. Do duplicate imports support duplicate additions?
No. Match unique underlying assets and invoices.
15. Is an evidence gap a final statutory disallowance?
Not by itself. Resolve the gap and determine the actual conclusion.
16. What should the final tax file contain?
The accepted activity position, actual evidence, asset-level checks, regime conclusion and reconciled computation.
Official sources
CBDT Circular 15/2016 Income Tax Department transition guidance