In force · As amended up to 2026-08
27. Crown corks, or other fittings of cork, rubber, polyethylene or any other material.
7. Ins. by Act 20 of 2002, s. 78 (w.e.f. 1-6-2002).
1[Provided also that no individual or a Hindu undivided family referred to in the second proviso shall be liable to deduct income-tax on the sum by way of fees for professional services incase such sum is credited or paid exclusively for personal purposes of such individual or any member of Hindu undivided family:]
2[Provided also that the provisions of this section shall have effect, as if for the words "ten per cent.", the words "two per cent." had been substituted in the case of a payee, engaged only in the business of operation of call centre.]
3* * * *
*
Explanation. —For the purposes of this section,—
(a) "professional services" means services rendered by a person in the course of carrying on legal, medical, engineering or architectural profession or the profession of accountancy or technical consultancy or interior decoration or advertising or such other profession as is notified by the Board for the purposes of section 44AA or of this section;
(b) "fees for technical services" shall have the same meaning as in Explanation 2 to clause (vii) of sub-section (1) of section 9;
4[(ba) "royalty" shall have the same meaning as in Explanation 2 to clause (vi) of sub-section (1) of section 9;]
7. Explanation 2 renumbered as Explanation 3 thereof by Act 13 of 1989, s. 9 (w.e.f. 1-4-1984).
8. Ins. by Act 26 of 1988, s. 12 (w.e.f. 1-4-1989).
9. Ins. by Act 33 of 1996, s. 18 (w.e.f. 1-4-1997).
10.Ins. by Act 14 of 2001, s. 27 (w.e.f. 1-4-2002).
1[ Explanation 3C .—For the removal of doubts, it is hereby declared that a deduction of any sum, being interest payable under clause (d) of this section, shall be allowed if such interest has been actually paid and any interest referred to in that clause which has been converted into a loan or borrowing shall not be deemed to have been actually paid.]
2[ Explanation 3D .—For the removal of doubts, it is hereby declared that a deduction of any sum, being interest payable under clause (e) of this section, shall be allowed if such interest has been actually paid and any interest referred to in that clause which has been converted into a loan or advance shall not be deemed to have been actually paid.]
3[ Explanation 4.—For the purposes of this section,—
(a) "public financial institutions" shall have the meaning assigned to it in section 4A of the Companies Act, 1956 (1 of 1956);
4 [(aa) "scheduled bank" shall have the meaning assigned to it in the Explanation to clause (iii) of sub-section (5) of section 11;]
7. The proviso substituted by Act 14 of 2001, s. 44 (w.e.f. 1-4-2002).
8. Ins. by s. 44, ibid. (w.e.f. 1-4-2001).
9. Subs. by Act 10 of 2000, s. 38, for "any industrial undertaking " (w.e.f. 1-4-2000).
10. Subs. by Act 14 of 2001, s. 44, for "industrial undertaking" (w.e.f. 1-4-2002).
11. Subs. by Act 23 of 2004, s. 17, for "undertaking referred to in clause (iv)" (w.e.f. 1-4-2005).
12. Subs. by Act 22 of 2007, s. 28, for "clause (iv)" (w.e.f. 1-4-2008).
13. The words, brackets and figures "or clause (vi)" omitted by Act 33 of 2009, s. 36 (w.e.f. 1-4-2010).
(ii) it is not formed by the transfer to a new business of machinery or plant previously used for any purpose:
1[Provided that nothing contained in this sub-section shall apply in the case of transfer, either in whole or in part, of machinery or plant previously used by a State Electricity Board referred to in clause (7) of section 2 of the Electricity Act, 2003 (36 of 2003), whether or not such transfer is in pursuance of the splitting up or reconstruction or reorganisation of the Board under Part XIII of that Act.]
Explanation 1.—For the purposes of clause (ii), any machinery or plant which was used outside India by any person other than the assessee shall not be regarded as machinery or plant previously used for any purpose, if the following conditions are fulfilled, namely :—
7. The Proviso omitted by 14 of 2010, s. 44 (w.e.f. 1-4-2010). Earlier provisos inserted by Act 23 of 2004, s. 50 (w.e.f. 1-4-2005).
8. The words "Provided further" omitted by s. 44, ibid. (w.e.f. 1-4-2010).
9. Subs. by Act 21 of 2006, s. 47, for "1st day of April, 2006" (w.e.f. 1-4-2005).
10. Ins. by Act 3 of 1989, s. 34 (w.e.f. 1-4-1989).
11. Subs. by Act 21 of 2006, s. 47, for "after the end of each financial year" (w.e.f. 1-4-2006).
12. Subs. by Act 23 of 2004, s. 50, for "prepare half-yearly returns of the period ending on the 30[th] Septmebt and 31[st] March in each financial year" (w.e.f. 1-10-2004).
13. Subs. by s. 50, ibid ., for "prescribed income-tax authority" (w.e.f. 1-10-2004).
1[Provided that the Board may, if it considers necessary or expedient so to do, frame a scheme for the purposes of filing such returns with such other authority or agency referred to in this sub-section.]
(c) where any sum referred to in sub-section (1) is credited to any account, whether called "suspense account" or by any other name, in the books of account of the person liable to pay such sum, such crediting shall be deemed to be credit of such sum to the account of the payee and the provisions of this section shall apply accordingly.
7. The Explanation renumbered as Explanation 2 thereof by Act 29 of 2006, s. 5 (w.e.f. 1-4-2006).
8. Ins. by Act 14 of 2001, s. 23 (w.e.f. 1-4-2002).
9. Ins. by Act 26 of 1997, s. 5 (w.e.f. 1-4-1998).
10. Subs. by Act 14 of 2001, s. 23, for "engaged in the business of" (w.e.f. 1-4-2002).
11. Subs. by Act 33 of 2009, s. 12, for "the business of manufacture or production of any drugs, pharmaceuticals, electronic equipments, computers, telecommunication equipments, chemicals or any other article or thing notified by the Board" (w.e.f. 1-4-2010).
(b) "State financial corporation" means a financial corporation established under section 3 or section 3A or an institution notified under section 46 of the State Financial Corporations Act, 1951 (63 of 1951);
(c) "State industrial investment corporation" means a Government company within the meaning of section 617 of the Companies Act, 1956 (1 of 1956), engaged in the business of providing longterm finance for industrial projects and[5] [eligible for deduction under clause (viii) of sub-section (1) ofsection 36].]
6[(d) "co-operative bank", primary agricultural credit society" and "primary co-operative agricultural and rural development bank" shall have the meanings respectively assigned to them in the Explanation to sub-section (4) of section 80P.]
(a) such machinery or plant was not, at any time previous to the date of the installation by the assessee, used in India;
(b) such machinery or plant is imported into India from any country outside India; and
(c) no deduction on account of depreciation in respect of such machinery or plant has been allowed or is allowable under the provisions of this Act in computing the total income of any person for any period prior to the date of the installation of machinery or plant by the assessee.
Explanation 2.—Where in the case of an[2] [undertaking], any machinery or plant or any part thereof previously used for any purpose is transferred to a new business and the total value of the machinery or plant or part so transferred does not exceed twenty per cent of the total value of the machinery or plant used in the business, then, for the purposes of clause (ii) of this sub-section, the condition specified therein shall be deemed to have been complied with.
(4) This section applies to—
(i) any enterprise carrying on the business[3] [of (i) developing or (ii) operating and maintaining or (iii) developing, operating and maintaining] any infrastructure facility which fulfils all the following conditions, namely :—
(a) it is owned by a company registered in India or by a consortium of such companies[4] [or by an authority or a board or a corporation or any other body established or constituted under any Central or State Act]:
2[(5B) Without prejudice to the provisions of sub-section (5A), any person collecting tax, other than in a case where the seller is a company, the Central Government or a State Government, may at his option, deliver or cause to be delivered such return to the prescribed income-tax authority in accordance with such scheme as may be specified by the Board in this behalf, by notification in the Official Gazette, and subject to such conditions as may be specified therein, on or before the prescribed time after the end of each financial year, on a floppy, diskette, magnetic cartridge tape, CD-ROM or any other computer readable media (hereinafter referred to as the computer media) and in the manner as may be specified in that scheme:
Provided that where the person collecting tax is a company or the Central Government or a State Government, such person shall, in accordance with the provisions of this section, deliver or cause to be delivered, within the prescribed time after the end of each financial year, such returns on computer media under the said scheme.
(5C) Notwithstanding anything contained in any other law for the time being in force, a return filed on computer media shall be deemed to be a return for the purposes of sub-section (5A) and the rules made thereunder and shall be admissible in any proceedings made thereunder, without further proof of production of the original, as evidence of any contents of the original or of any facts stated therein.
(ii) the amount of the development allowance, to the extent to which it has not been allowed as aforesaid, shall be carried forward to the following assessment year, and the development allowance to be allowed for the following assessment year shall be such amount as is sufficient to reduce the total income of the assessee assessable for that assessment year, computed in the manner aforesaid, to nil, and the balance of the development allowance, if any, still outstanding shall be carried forward to the following assessment year and so on, so, however, that no portion of the development allowance shall be carried forward for more than eight assessment years immediately succeeding the assessment year in which the deduction was first allowable.
Explanation .—Where for any assessment year development allowance is to be allowed in accordance with the provisions of sub-section (2) in respect of more than one previous year, and the total income of the assessee assessable for that assessment year[3] [(the total income for this purpose being computed after deduction of the allowance under sub-section (1) or sub-section ( 1A clause (ii) of sub-section (2) of section 33, but without making any deduction under sub-section (1) of this section or any deduction under Chapter VIA[4] * )] is less than the amount of the development allowance due to be made in respect of that assessment year, the following procedure shall be followed, namely:—
7. The word "and" omitted by Act 25 of 2014, s. 12 (w.e.f. 1-4-2015).
8. Ins. by s. 12, ibid . (w.e.f. 1-4-2015).
5[(b) it has entered into an agreement with the Central Government or a State Government or a local authority or any other statutory body for (i) developing or (ii) operating and maintaining or (iii) developing, operating and maintaining a new infrastructure facility;]
(c) it has started or starts operating and maintaining the infrastructure facility on or after the 1st day of April, 1995:
Provided that where an infrastructure facility is transferred on or after the 1st day
of April, 1999 by an enterprise which developed such infrastructure facility (hereafter
referred to in this section as the transferor enterprise) to another enterprise (hereafter in this section referred to as the transferee enterprise) for the purpose of operating and maintaining the infrastructure facility on its behalf in accordance with the agreement with the Central
1. Ins. by Act 23 of 2004, s. 17 (w.e.f. 1-4-2005).
2. Subs. by Act 14 of 2001, s. 44, for "industrial undertaking" (w.e.f. 1-4-2002).
3. Subs. by s. 44, ibid ., for "of (i) developing, (ii) maintaining and operating or (iii) developing, maintaining and operating"
(w.e.f. 1-4-2002).
4. Ins. by Act 18 of 2005, s. 26 (w.e.f. 1-4-2006).
5. Subs. by Act 14 of 2001, s. 44, for clause (b) (w.e.f. 1-4-2002).
(5D)Where the Assessing Officer considers that the return delivered or caused to be delivered under sub-section (5B) is defective, he may intimate the defect to the person collecting tax and give him an opportunity of rectifying the defect within a period of fifteen days from the date of such intimation or within such further period which, on an application made in this behalf, the Assessing Officer may, in his discretion, allow; and if the defect is not rectified within the said period of fifteen days or, as the case may be, the further period so allowed, then, notwithstanding anything contained in any other provision of this Act, such return shall be treated as an invalid return and the provisions of this Act shall apply as if such person had failed to deliver the return.]
(6) Any person responsible for collecting the tax who fails to collect the tax in accordance with the provisions of this section, shall, notwithstanding such failure, be liable to pay the tax to the credit of the Central Government in accordance with the provisions of sub-section (3).
3[(6A) If any person responsible for collecting tax in accordance with the provisions of this section does not collect the whole or any part of the tax or after collecting, fails to pay the tax as required by or under this Act, he shall, without prejudice to any other consequences which he may incur, be deemed to be an assessee in default in respect of the tax:
being computed after deduction of the allowance under sub-section (1) or sub-section (1A) or
(i) the allowance under clause (ii) of sub-section (2) of this section shall be made before any allowance under clause (i) of that sub-section is made; and
1. Subs. by Act 12 of 1990, s. 9, for the proviso (w.e.f. 1-4-1990).
2. Subs. by Act 13 of 1966, s. 8, for "the third succeeding previous year next following the previous year in which the land has been prepared" (w.e.f. 1-4-1966).
3. Subs. by Act 20 of 1967, s. 33 and the third Schedule, for "(the total income for this purpose being computed after making the allowance under sub-section (1) or sub-section (1A) or clause (ii) of sub-section (2) of section 33 but without making any allowance under sub-section (1) of this section" (w.e.f. 1-4-1968).
4. The words, figures and letter "or section 280-O" omitted by Act 26 of 1988, s. 54 (w.e.f. 1-4-1988).
5. Subs. by Act 13 of 1966, s. 8, for "calculated at the rates specified in sub-section (1)" (w.e.f. 1-4-1966).
(ii) where an allowance has to be made under clause (ii) of sub-section (2) of this section in respect of amounts carried forward from more than one assessment year, the amount carried forward from an earlier assessment year shall be allowed before any amount carried forward from a later assessment year.
7. Restored by Act 3 of 1989, s. 95 (h) (w.e.f. 1-4-1989). Earlier subs. by Act 4 of 1988, s. 25 (w.e.f. 1-4-1989).
8. Subs. by Act 16 of 1972, s. 17, for "section 11" (w.e.f. 1-4-1973).
9. Subs. by s. 17, for "section 11" (w.e.f. 1-4-1973).
10. Subs. by Act 20 of 2002, s. 30, for the Explanation 4 (w.e.f. 1-4-2003).
11. Ins. by Act 66 of 1976, s. 17 (w.e.f. 1-4-1976).
12. Sub-section (6) omitted by Act 19 of 1968, s. 30 and the Third Schedule (w.e.f. 1-4-1969).
4[Provided that any person5*responsible for collecting tax in accordance with the provisions of this section, who fails to collect the whole or any part of the tax on the amount received from a buyer or licensee or lessee or on the amount debited to the account of the buyer or licensee or lessee shall not be deemed to be an assessee in default in respect of such tax if such buyer or licensee or lessee—
(i) has furnished his return of income under section 139;
1. Ins. by Act 23 of 2004, s. 50 (w.e.f. 1-10-2004).
2. Subs. by s. 50, ibid ., for sub-sections (5B) and (5C) (w.e.f. . 1-4-2005).
3. Ins. by Act 21 of 2006, s. 47 (w.e.f. 1-4-2007).
4. Ins. by Act 23 of 2012, s. 81 (w.e.f. 1-7-2012).
5. The words ", other than a person referred to in sub-section (1D)," omitted by Act 7 of 2017, s. 72 (w.e.f. 1-4-2017).
(ii) has taken into account such amount for computing income in such return of income; and
(iii) has paid the tax due on the income declared by him in such return of income,
and the person furnishes a certificate to this effect from an accountant in such form as may be prescribed:]
1[Provided further that] no penalty shall be charged under section 221 from such person unless the Assessing Officer is satisfied that the person has without good and sufficient reasons failed to collect and pay the tax.]
(3) The deduction under sub-section (1) shall be allowed only if the following conditions are fulfilled, namely:—
(i) the particulars prescribed in this behalf have been furnished by the assessee;
(ii) an amount equal to seventy-five per cent. of the development allowance to be actually allowed is debited to the profit and loss account of the relevant previous year and credited to a reserve account to be utilised by the assessee during a period of eight years next following for the purposes of the business of the undertaking, other than—
- (a) for distribution by way of dividends or profits; or
(b) for remittance outside India as profits or for the creation of any asset outside India; and
(iii) such other conditions as may be prescribed.
(4) If any such land is sold or otherwise transferred by the assessee to any person at any time before the expiry of eight years from the end of the previous year in which the deduction under sub-section (1) was allowed, any allowance under this section shall be deemed to have been wrongly made for the purposes of this Act, and the provisions of sub-section (5A) of section 155 shall apply accordingly:
Provided that this sub-section shall not apply—
7. The certain words, brackets and figures omitted by Act 27 of 1999, s. 69 (w.e.f. 1-4-2000).
(7) Without prejudice to the provisions of sub-section (6), if the[2] [person responsible for collecting tax] does not collect the tax or after collecting the tax fails to pay it as required under this section, he shall be liable to pay simple interest at the rate of[3] [one per cent.] per month or part thereof on the amount of such tax from the date on which such tax was collectible to the date on which the tax was actually paid 4[and such interest shall be paid before furnishing the quarterly statement for each quarter in accordance with the provisions of sub-section (3)]:
5[Provided that in case any person6*responsible for collecting tax in accordance with the provisions of this section, fails to collect the whole or any part of the tax on the amount received from a buyer or licensee or lessee or on the amount debited to the account of the buyer or licensee or lessee but is not deemed to be an assessee in default under the first proviso of sub-section (6A), the interest shall be payable from the date on which such tax was collectible to the date of furnishing of return of income by such buyer or licensee or lessee.]
(8) Where the tax has not been paid as aforesaid, after it is collected, the amount of the tax together with the amount of simple interest thereon referred to in sub-section (7) shall be a charge upon all the assets of the[2] [person responsible for collecting tax].]
(i) where the land is sold or otherwise transferred by the assessee to the Government, a local authority, a corporation established by a Central, State or Provincial Act, or a Government company as defined in section 617 of the Companies Act, 1956 (1 of 1956); or
(ii) where the sale or transfer of the land is made in connection with the amalgamation or succession referred to in sub-section (5) or sub-section (6).
1[(5) Where, in a scheme of amalgamation, the amalgamating company sells or otherwise transfers to the amalgamated company any land in respect of which development allowance has been allowed to the amalgamating company under sub-section (1),—
(a) the amalgamated company shall continue to fulfil the conditions mentioned in sub-section (3) in respect of the reserve created by the amalgamating company and in respect of the period within which such land shall not be sold or otherwise transferred and in default of any of these conditions, the provisions of sub-section (5A) of section 155 shall apply to the amalgamated company as they would have applied to the amalgamating company had it committed the default; and
7. The word "Goa," omitted by Act 32 of 994, s. 47 (w.e.f. 1-4-1995).
1 [ CHAPTER XXA
ACQUISITION OF IMMOVABLE PROPERTIES IN CERTAIN CASES OF TRANSFER TO COUNTERACT EVASION OF TAX
7[(9) Where the Assessing Officer is satisfied that the total income of the 8[buyer or licensee or lessee] justifies the collection of the tax at any lower rate than the relevant rate specified in sub-section (1)[9] [or sub-section (1C)][10] *, the Assessing Officer shall, on an application made by the buyer or licensee or lessee in this behalf, give to him a certificate for collection of tax at such lower rate than the relevant rate specified in sub-section (1)[9] [or sub-section (1C)][10] *.
(10) Where a certificate under sub-section (9) is given, the person responsible for collecting the tax shall, until such certificate is cancelled by the Assessing Officer, collect the tax at the rates specified in such certificate.
1. Subs. by Act 23 of 2012, s. 81, for "Provided that" (w.e.f. 1-7-2012).
2. Subs. by Act 21 of 2006, s. 47, for "seller" (w.e..f 1-4-2007).
3. Subs. by Act 54 of 2003, s. 9, for "one and one-fourth per cent." (w.e.f. 8-9-2003).
4. Ins. by Act 21 of 2006, s. 47 (w.e.f. 1-6-2006).
5. Ins. by Act 23 of 2012, s. 81 (w.e.f. 1-7-2012).
6. The words ", other than a person referred to in sub-section (1D)," omitted by Act 7 of 2017, s. 72 (w.e.f. 1-4-2017).
7. Ins. by Act 27 of 1999, s. 80 (w.e.f. 1-6-1999).
8. Subs. by Act 23 of 2004, s. 50, for "buyer" (w.e.f. 1-10-2004).
9. Ins. by s. 50, ibid. (w.e.f. 1-10-2004).
(b) the balance of development allowance, if any, still outstanding to the amalgamating company in respect of such land shall be allowed to the amalgamated company in accordance with the provisions of sub-section (2), so, however, that the total period for which the balance of development allowance shall be carried forward in the assessments of the amalgamating company and the amalgamated company shall not exceed the period of eight years specified in sub-section (2) and the amalgamated company shall be treated as the assessee in respect of such land for the purposes of this section.
1. Subs. by Act 20 of 1967, s. 10, for sub-section (5) (w.e.f. 1-4-1967).
(6) Where a firm is succeeded to by a company in the business carried on by it as a result of which the firm sells or otherwise transfers to the company any land on which development allowance has been allowed, the provisions of clauses (a) and (b) of sub-section (5) shall, so far as may be, apply to the firm and the company.
Explanation .—The provisions of this sub-section shall apply if the conditions laid down in the Explanation to sub-section (4) of section 33 are fulfilled.
(7) For the purposes of this section, "actual cost of planting" means the aggregate of—
(i) the cost of preparing the land;
(ii) the cost of seeds, cutting and nurseries;
(iii) the cost of planting and replanting; and
7. The Second and third proviso omitted by s. 75, ibid. (w.e.f. 1-10-2014).
8. Ins. by Act 28 of 2016, s. 111 (w.e.f. 1-6-2016).
(9) Where the Assessing Officer is satisfied that the guarantee referred to in sub-section (3) is not required any more to protect the interests of the revenue, he shall release that guarantee forthwith.
Explanation .—For the purposes of this section, the expression "scheduled bank" shall mean a bank included in the Second Schedule to the Reserve Bank of India Act, 1934 (2 of 1934).]
10. The words "or sub-section (1D)" omitted by Act 7 of 2017, s. 72 (w.e.f. 1-4-2017).
(11) The Board may, having regard to the convenience of assessees and the interests of revenue, by notification in the Official Gazette, make rules specifying the cases in which, and the circumstances under which, an application may be made for the grant of a certificate under sub-section (9) and the conditions subject to which such certificate may be granted and providing for all other matters connected therewith.]
1[ Explanation. —For the purposes of this section,—
2[(a) "accountant" shall have the meaning assigned to it in the Explanation to sub-section (2) of section 288;
(aa) "buyer" with respect to—
(i) sub-section (1) means a person who obtains in any sale, by way of auction, tender or any other mode, goods of the nature specified in the Table in sub-section (1) or the right to receive any such goods but does not include,—
(A) a public sector company, the Central Government, a State Government, and an embassy, a High Commission, legation, commission, consulate and the trade representation, of a foreign State and a club; or
(B) a buyer in the retail sale of such goods purchased by him for personal consumption;
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* * *
4[(iii) sub-section (1F) means a person who obtains in any sale, goods of the nature specified in the said sub-section, but does not include,—
(iv) the cost of upkeep thereof for the previous year in which the land has been prepared and the three successive previous years next following such previous year,
reduced by that portion of the cost, if any, as has been met directly or indirectly by any other person or authority:
1[Provided that where such cost exceeds—
(i) forty thousand rupees per hectare in respect of land situate in a hilly area comprised in the district of Darjeeling; or
(ii) thirty-five thousand rupees per hectare in respect of land situate in a hilly area comprised in an area other than the district of Darjeeling; or
(iii) thirty thousand rupees per hectare in any other area,
then, the excess shall be ignored.
Explanation .—For the purposes of this proviso, "district of Darjeeling" means the district of Darjeeling as on the 28th day of February, 1981, being the date of introduction of the Finance Bill, 1981, in the House of the People.]
(8) The Board may, having regard to the elevation and topography, by general or special order, declare any areas to be hilly areas for the purposes of this section and such order shall not be questioned before any court of law or any other authority.
2[ Explanation .—For the purposes of this section, an assessee having a leasehold or other right of occupancy in any land shall be deemed to own such land and where the assessee transfers such right, he shall be deemed to have sold or otherwise transferred such land.]
7. Interpretation. — (1) For the purposes of these rules—
2* * * * *
(ii) "investments" includes securities, stocks and shares;
3* * * * *
(iv) "life insurance business" means life insurance business as defined in clause (11) of section 2 of the Insurance Act, 1938 (4 of 1938);
(v) "rule" means a rule contained in this Schedule.
(2) References in these rules to the Insurance Act, 1938 (4 of 1938), or any provision thereof, shall, in relation to the Life Insurance Corporation of India, be construed as references to that Act or provision as read with section 43 of the Life Insurance Corporation Act, 1956 (31 of 1956).
1. Subs. by Act 14 of 2010, s. 52, for clause (b) (w.e.f. 1-4-2011).
2. Clause (i) omitted by Act 66 of 1976, s. 23 (w.e.f. 1-4-1977). Earlier clause (i) was amended by Act 20 of 1967, s. 32 (w.e.f. 1-4-1967).
3. Clause (iii) omitted by s. 23, ibid. (w.e.f. 1-4-1977).
(A) the Central Government, a State Government and an embassy, a High Commission, legation, commission, consulate and the trade representation of a foreign State; or
(B) a local authority as defined in Explanation to clause (20) of section 10; or
(C) a public sector company which is engaged in the business of carrying passengers.]
5* *
* * *]
6[(b) "scrap" means waste and scrap from the manufacture or mechanical working of materials which is definitely not usable as such because of breakage, cutting up, wear and other reasons;]
(c) "seller" means the Central Government, a State Government or any local authority or corporation or authority established by or under a Central, State or Provincial Act, or any company or firm or co-operative society and also includes an individual or a Hindu undivided family whose total sales, gross receipts or turnover from the business or profession carried on by him exceed the monetary limits specified under clause (a) or clause (b) of section 44AB during the financial yearimmediately preceding the financial year in which the goods of the nature specified in the Table in sub-section (1)[7] [are sold].
1. Ins. by Act 18 of 1992, s. 79 (w.e.f. 1-4-1992).
2. Subs. by Act 23 of 2012, s. 81, for clause (a) (w.e.f. 1-7-2012).
1. Subs. by Act 16 of 1981, s. 6, for the proviso and Explanation (w.e.f. 1-4-1982).
2. Ins. by Act 25 of 1975, s. 5 (w.e.f. 1-4-1962).
7. Suit against purchaser not maintainable on ground of purchase being made on behalf of plaintiff. —(1) No suit shall be maintained against any person claiming title under a purchase certified by the Tax Recovery Officer in the manner laid down in this Schedule, on the ground that the purchase was made on behalf of the plaintiff or on behalf of someone through whom the plaintiff claims.
(2) Nothing in this section shall bar a suit to obtain a declaration that the name of any purchaser certified as aforesaid was inserted in the certificate fraudulently or without the consent of the real purchaser, or interfere with the right of a third person to proceed against that property, though ostensibly sold to the certified purchaser, on the ground that it is liable to satisfy a claim of such third person against the real owner.
(8) Where any[3] [goods or services] held for the purposes of the eligible business are transferred to any other business carried on by the assessee, or where any[3] [goods or services] held for the purposes of any other business carried on by the assessee are transferred to the eligible business and, in either case, the consideration, if any, for such transfer as recorded in the accounts of the eligible business does not correspond to the market value of such[3] [goods or services] as on the date of the transfer, then, for the purposes of the deduction under this section, the profits and gains of such eligible business shall be computed as if the transfer, in either case, had been made at the market value of such[3] [goods or services] as on that date:
Provided that where, in the opinion of the Assessing Officer, the computation of the profits and gains of the eligible business in the manner hereinbefore specified presents exceptional difficulties, the Assessing Officer may compute such profits and gains on such reasonable basis as he may deem fit.
4[ Explanation .—For the purposes of this sub-section, "market value", in relation to any goods or services, means—
(i) the price that such goods or services would ordinarily fetch in the open market; or
(ii) the arm's length price as defined in clause (ii) of section 92F, where the transfer of such goods or services is a specified domestic transaction referred to in section 92BA.]
7. The rule 59 re-numbered as sub-rule (2) thereof by Act 41 of 1975, s. 81 (w.e.f. 1-10-1975).
1[(3) Where the 2[Assessing Officer] referred to in sub-rule (1) is declared to be the purchaser of the property at any subsequent sale, nothing contained in rule 57 shall apply to the case and the amount of the purchase price shall be adjusted towards the amount specified in the certificate.]
(9) Where any amount of profits and gains of an[2] [undertaking] or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading" C.—Deductions in respect of certain incomes ", and shall in no case exceed the profits and gains of such eligible business of[2] [undertaking] or enterprise, as the case may be.
1. Subs. by Act 20 of 2002, s. 33, for "Where the assessee is a person other than a company or a co-operative society, the deduction" (w.e.f. 1-4-2003).
2. Subs. by Act 14 of 2001, s. 44, for "industrial undertaking" (w.e.f. 1-4-2002).
3. Subs. by s. 44, ibid., for "goods" (w.e.f. 1-4-2002).
4. Subs. by Act 23 of 2012, s. 30, for the Explanation (w.e.f. 1-4-2013).
8[ 7. Exemption for employee's contributions. —An employee participating in a recognised provident fund shall, in respect of his own contributions to his individual account in the fund in the previous year, be entitled to a deduction in the computation of his total income of an amount determined in accordance with[9] [section 80C].]
(10) Where it appears to the Assessing Officer that, owing to the close connection between the assessee carrying on the eligible business to which this section applies and any other person, or for any other reason, the course of business between them is so arranged that the business transacted between them produces to the assessee more than the ordinary profits which might be expected to arise in such eligible business, the Assessing Officer shall, in computing the profits and gains of such eligible business for the purposes of the deduction under this section, take the amount of profits as may be reasonably deemed to have been derived therefrom:
1[Provided that in case the aforesaid arrangement involves a specified domestic transaction referred to in section 92BA, the amount of profits from such transaction shall be determined having regard to arm's length price as defined in clause (ii) of section 92F.]
(11) The Central Government may, after making such inquiry as it may think fit, direct, by notification in the Official Gazette, that the exemption conferred by this section shall not apply to any class of industrial undertaking or enterprise with effect from such date as it may specify in the notification.
(12) Where any undertaking of an Indian company which is entitled to the deduction under this section is transferred, before the expiry of the period specified in this section, to another Indian company in a scheme of amalgamation or demerger—
7. Deduction from pay of and contributions on behalf of employee to be included in return. —Where an employer deducts from the emoluments paid to an employee or pays on his behalf any contributions of that employee to an approved superannuation fund, he shall include all such deductions or payments in the return which he is required to furnish under[9] * section 206.
(a) no deduction shall be admissible under this section to the amalgamating or the demerged company for the previous year in which the amalgamation or the demerger takes place; and
(b) the provisions of this section shall, as far as may be, apply to the amalgamated or the resulting company as they would have applied to the amalgamating or the demerged company if the amalgamation or demerger had not taken place.
2[(12A) Nothing contained in sub-section (12) shall apply to any enterprise or undertaking which is transferred in a scheme of amalgamation or demerger on or after the 1st day of April, 2007.]
3[(13) Nothing contained in this section shall apply to any Special Economic Zones notified on or after the 1st day of April, 2005 in accordance with the scheme referred to in sub-clause (iii) of clause (c) of sub-section (4).]
4[ Explanation .—For the removal of doubts, it is hereby declared that nothing contained in this section shall apply in relation to a business referred to in sub-section (4) which is in the nature of a works contract awarded by any person (including the Central or State Government) and executed by the undertaking or enterprise referred to in sub-section (1).]
1. Ins. by Act 23 of 2012, s. 30 (w.e.f. 1-4-2013).
2. Ins. by Act 22 of 2007, s. 28 (w.e.f. 1-4-2008).
3. Ins. by Act 28 of 2005, s. 27 and the Second Schedule (w.e.f. 10-2-2006).
4. Ins. by Act 33 of 2009, s. 36 (w.e.f. 1-4-2000).
7. contributions by employer, when deemed to be income of employer. — Where any contributions by an employer (including the interest thereon, if any) are repaid to the employer, the amount so repaid shall be deemed for the purposes of income-tax[1] * to be the income of the employer of the previous year in which they are so repaid.
1[ 80-IAB. Deductions in respect of profits and gains by an undertaking or enterprise engaged in development of Special Economic Zone. —(1) Where the gross total income of an assessee, being a Developer, includes any profits and gains derived by an undertaking or an enterprise from any business of developing a Special Economic Zone, notified on or after the 1st day of April, 2005 under the Special Economic Zones Act, 2005, there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction of an amount equal to one hundred per cent of the profits and gains derived from such business for ten consecutive assessment years.
2[Provided that the provisions of this section shall not apply to an assessee, being a developer, where the development of Special Economic Zone begins on or after the 1st day of April, 2017.]
(2) The deduction specified in sub-section (1) may, at the option of the assessee, be claimed by him for any ten consecutive assessment years out of fifteen years beginning from the year in which a Special Economic Zone has been notified by the Central Government:
7. Barytes, Fluorite, Chalcocite, Selenium, and minerals of Zinc, Lead and Silver.
8. Tin and Tungsten minerals.
9. Limestone, Dolomite and Magnesite.
10. Ilmenite, Monazite, Zircon, Rutile, Garnet and Sillimanite.
11. Sulphides of Copper and Iron.
12. Coal, Fireclay and Shale.
13. Magnetite and Apatite.
14. Magnesite and Chromite.
15. Talc (Soapstone and Steatite) and Dolomite.
Provided that where in computing the total income of any undertaking, being a Developer for any assessment year, its profits and gains had not been included by application of the provisions of sub-section (13) of sectopm 80-IA, the undertaking being the Developer shall be entitled to deduction referred to in this section only for the unexpired period of ten consecutive assessment years and thereafter it shall be eligible for deduction from income as provided in sub-section (1) or sub-section (2), as the case may be:
assessment year, its profits and gains had not been included by application of the provisions of
Provided further that in a case where an undertaking, being a Developer who develops a Special Economic Zone on or after the 1st day of April, 2005 and transfers the operation and maintenance of such Special Economic Zone to another Developer (hereafter in this section referred to as the transferee Developer), the deduction under sub-section (1) shall be allowed to such transferee Developer for the remaining period in the ten consecutive assessment years as if the operation and maintenance were not so transferred to the transferee Developer.
(3) The provisions of sub-section (5) and sub-sections (7) to (12) of section 80-JIA shall apply to the Special Economic Zones for the purpose of allowing deductions under sub-section (1).
Explanation.— For the purposes of this section, "Developer" and "Special Economic Zone" shall have the same meanings respectively as assigned to them in clauses (g) and (za) of section 2 of the Special Economic Zones Act, 2005.]
3[ 80-IAC. Special provision in respect of specified business. —(1) Where the gross total income of an assessee, being an eligible start-up, includes any profits and gains derived from eligible business, there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction of an amount equal to one hundred per cent of the profits and gains derived from such business for three consecutive assessment years.
(2) The deduction specified in sub-section (1) may, at the option of the assessee, be claimed by him for any three consecutive assessment years out of[4] [seven years] beginning from the year in which the eligible start-up is incorporated.
- (3) This section applies to a start-up which fulfils the following conditions, namely:—
(i) it is not formed by splitting up, or the reconstruction, of a business already in existence:
1. Ins. by Act 28 of 2005, s. 27 and the Second Schedule (w.e.f. l0-2-2006).
2. Ins. by Act 28 of 2016, s. 41 (w.e.f. 1-4-2017).
3. Ins. by s. 42, ibid . (w.e.f. 1-4-2017).
4. Subs. by Act 7 of 2017, s. 36, for "five years" (w.e.f. 1-4-2018).
Provided that this condition shall not apply in respect of a start-up which is formed as a result of the re-establishment, reconstruction or revival by the assessee of the business of any such undertaking as referred to in section 33B, in the circumstances and within the period specified in that section;
(ii) it is not formed by the transfer to a new business of machinery or plant previously used for any purpose.
Explanation 1.—For the purposes of this clause, any machinery or plant which was used outside India by any person other than the assessee shall not be regarded as machinery or plant previously used for any purpose, if all the following conditions are fulfilled, namely:—
(a) such machinery or plant was not, at any time previous to the date of the installation by the assessee, used in India;
(b) such machinery or plant is imported into India;
(c) no deduction on account of depreciation in respect of such machinery or plant has been allowed or is allowable under the provisions of this Act in computing the total income of any person for any period prior to the date of the installation of the machinery or plant by the assessee.
Explanation 2.—Where in the case of a start-up, any machinery or plant or any part thereof previously used for any purpose is transferred to a new business and the total value of the machinery or plant or part so transferred does not exceed twenty per cent of the total value of the machinery or plant used in the business, then, for the purposes of clause (ii) of this sub-section, the condition specified therein shall be deemed to have been complied with.
(4) The provisions of sub-section (5) and sub-sections (7) to (11) of section 80-IA shall apply to the start-ups for the purpose of allowing deductions under sub-section (1).
Explanation .—For the purposes of this section,—
1[(i) "eligible business" means a business carried out by an eligible start up engaged in innovation, development or improvement of products or processes or services or a scalable business model with a high potential of employment generation or wealth creation;]
(ii) "eligible start-up" means a company or a limited liability partnership engaged in eligible business which fulfils the following conditions, namely:—
(a) it is incorporated on or after the 1st day of April, 2016 but before the 1st day of April,[2] [2021];
(b) the total turnover of its business does not exceed twenty-five crore rupees[3] [in the previous year relevant to the assessment year for which deduction under sub-section (1) is claimed]; and
(c) it holds a certificate of eligible business from the Inter-Ministerial Board of Certification as notified in the Official Gazette by the Central Government;
(iii) "limited liability partnership" means a partnership referred to in clause (n) of sub-section (1) of section 2 of the Limited Liability Partnership Act, 2008 (6 of 2009).]
1. Subs. by Act 13 of 2018, s. 28, for clause (i) (w.e.f. 1-4-2018).
2. Subs. by s. 28, ibid ., for "2019" (w.e.f. 1-4-2018).
3. Subs. by s. 28, ibid ., for "in any of the previous years beginning on or after the 1st day of April, 2016 and ending on the 31st day of March, 2021" (w.e.f. 1-4-2018).
80-IB. Deduction in respect of profits and gains from certain industrial undertakings other than infrastructure development undertakings. —(1) Where the gross total income of an assessee includes any profits and gains derived from any business referred to in sub-sections (3) to[1] [(11), (11A) and (11B)] (such business being hereinafter referred to as the eligible business), there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction from such profits and gains of an amount equal to such percentage and for such number of assessment years as specified in this section.
(2) This section applies to any industrial undertaking which fulfils all the following conditions, namely:—
(i) it is not formed by splitting up, or the reconstruction, of a business already in existence:
Provided that this condition shall not apply in respect of an industrial undertaking which is formed as a result of the re-establishment, reconstruction or revival by the assessee of the business of any such industrial undertaking as is referred to in section 33B, in the circumstances and within the period specified in that section;
(ii) it is not formed by the transfer to a new business of machinery or plant previously used for any purpose;
(iii) it manufactures or produces any article or thing, not being any article or thing specified in the list in the Eleventh Schedule, or operates one or more cold storage plant or plants, in any part of India:
Provided that the condition in this clause shall, in relation to a small scale industrial undertaking or an industrial undertaking referred to in sub-section (4) shall apply as if the words "not being any article or thing specified in the list in the Eleventh Schedule" had been omitted.
Explanation 1.— For the purposes of clause (ii), any machinery or plant which was used outside India by any person other than the assessee shall not be regarded as machinery or plant previously used for any purpose, if the following conditions are fulfilled, namely:—
(a) such machinery or plant was not, at any time previous to the date of the installation by the assessee, used in India;
(b) such machinery or plant is imported into India from any country outside India; and
(c) no deduction on account of depreciation in respect of such machinery or plant has been allowed or is allowable under the provisions of this Act in computing the total income of any person for any period prior to the date of the installation of the machinery or plant by the assessee.
Explanation 2.— Where in the case of an industrial undertaking, any machinery or plant or any part thereof previously used for any purpose is transferred to a new business and the total value of the machinery or plant or part so transferred does not exceed twenty per cent. of the total value of the machinery or plant used in the business, then, for the purposes of clause (ii) of this sub-section, the condition specified therein shall be deemed to have been complied with;
(iv) in a case where the industrial undertaking manufactures or produces articles or things, the undertaking employs ten or more workers in a manufacturing process carried on with the aid of power, or employs twenty or more workers in a manufacturing process carried on without the aid of power.
1. Subs. by Act 23 of 2004, s. 18, for "(11) and (11A)" (w.e.f. 1-4-2005). Earlier "(3) to (11) and (11A)" subs. by Act 14 of 2001, s. 45 (w.e.f. 1-4-2002).
(3) The amount of deduction in the case of an industrial undertaking shall be twenty-five per cent. (or thirty per cent. where the assessee is a company), of the profits and gains derived from such industrial undertaking for a period of ten consecutive assessment years (or twelve consecutive assessment years where the assessee is a co-operative society) beginning with the initial assessment year subject to the fulfilment of the following conditions, namely:—
(i) it begins to manufacture or produce, articles or things or to operate such plant or plants at any time during the period beginning from the 1st day of April, 1991 and ending on the 31st day of March, 1995 or such further period as the Central Government may, by notification in the Official Gazette, specify with reference to any particular undertaking;
(ii) where it is an industrial undertaking being a small scale industrial undertaking, it begins to manufacture or produce articles or things or to operate its cold storage plant [not specified in sub-section (4) or sub-section (5)] at any time during the period beginning on the 1st day of April, 1995 and ending on the[1] [31st day of March, 2002].
manufacture or produce articles or things or to operate its cold storage plant [not specified in
(4) The amount of deduction in the case of an industrial undertaking in an industrially backward State specified in the Eighth Schedule shall be hundred per cent of the profits and gains derived from such industrial undertaking for five assessment years beginning with the initial assessment year and thereafter twenty-five per cent. (or thirty per cent. where the assessee is a company) of the profits and gains derived from such industrial undertaking:
Provided that the total period of deduction does not exceed ten consecutive assessment years (or twelve consecutive assessment years where the assessee is a co-operative society) subject to fulfilment of the condition that it begins to manufacture or produce articles or things or to operate its cold storage plant or plants during the period beginning on the 1st day of April, 1993 and ending on the[2] [31st day of March, 2004]:
Provided further that in the case of such industries in the North-Eastern Region, as may be notified by the Central Government, the amount of deduction shall be hundred per cent. of profits and gains for a period of ten assessment years, and the total period of deduction shall in such a case not exceed ten assessment years:
3[Provided also that no deduction under this sub-section shall be allowed for the assessment year beginning on the 1st day of April, 2004 or any subsequent year to any undertaking or enterprise referred to in sub-section (2) of section 80-IC:]
4[Provided also that in the case of an industrial undertaking in the State of Jammu and Kashmir, the provisions of the first proviso shall have effect as if for the figures, letters and words "31st day of March, 2004", the figures, letters and words[5] [31st day of March, 2012] had been substituted:
Provided also that no deduction under this sub-section shall be allowed to an industrial undertaking in the State of Jammu and Kashmir which is engaged in the manufacture or production of any article or thing specified in Part C of the Thirteenth Schedule.]
1. Subs. by Act 10 of 2000, s. 39, for "31st day of March, 2000" (w.e.f. 1-4-2001).
2. Subs. by Act 20 of 2002, s. 34, for "31st day of March, 2002" (w.e.f. 1-4-2003).
3. Ins. by Act 32 of 2003, s. 39 (w.e.f. 1-4-2004).
4. Subs. by Act 23 of 2004, s. 18, for the proviso (w.e.f. 1-4-2005).
5. Subs. by Act 22 of 2007, s. 29, for "31st day of March, 2007" (w.e.f. 1-4-2008).
(5) The amount of deduction in the case of an industrial undertaking located in such industrially backward districts as the Central Government may, having regard to the prescribed guidelines, by notification in the Official Gazette, specify in this behalf as industrially backward district of category 'A' or an industrially backward district of category 'B' shall be,—
(i) hundred per cent of the profits and gains derived from an industrial undertaking located in a backward district of category 'A' for five assessment years beginning with the initial assessment year and thereafter, twenty-five per cent. (or thirty per cent. where the assessee is a company) of the profits and gains of an industrial undertaking :
Provided that the total period of deduction shall not exceed ten consecutive assessment years or where the assessee is a co-operative society, twelve consecutive assessment years:
Provided further that the industrial undertaking begins to manufacture or produce articles or things or to operate its cold storage plant or plants at any time during the period beginning on the 1st day of October, 1994 and ending on the[1] [31st day of March, 2004];
(ii) hundred per cent. of the profits and gains derived from an industrial undertaking located in a backward district of category 'B' for three assessment years beginning with the initial assessment year and thereafter, twenty-five per cent (or thirty per cent where the assessee is a company) of the profits and gains of an industrial undertaking:
Provided that the total period of deduction does not exceed eight consecutive assessment years (or where the assessee is a co-operative society, twelve consecutive assessment years):
Provided further that the industrial undertaking begins to manufacture or produce articles or things or to operate its cold storage plant or plants at any time during the period beginning on the 1st day of October, 1994 and ending on the[1] [31st day of March, 2004].
(6) The amount of deduction in the case of the business of a ship shall be thirty per cent. of the profits and gains derived from such ship for a period of ten consecutive assessment years including the initial assessment year provided that the ship—
(i) is owned by an Indian company and is wholly used for the purposes of the business carried on by it;
(ii) was not, previous to the date of its acquisition by the Indian company, owned or used in Indian territorial waters by a person resident in India; and
(iii) is brought into use by the Indian company at any time during the period beginning on the 1st day of April, 1991 and ending on the 31st day of March, 1995.
(7) The amount of deduction in the case of any hotel shall be—
(a) fifty per cent. of the profits and gains derived from the business of such hotel for a period of ten consecutive years beginning from the initial assessment year as is located in a hilly area or a rural area or a place of pilgrimage or such other place as the Central Government may, having regard to the need for development of infrastructure for tourism in any place and other relevant considerations, specify by notification in the Official Gazette and such hotel starts functioning at any time during the period beginning on the 1st day of April, 1990 and ending on the 31st day of March, 1994 or beginning on the 1st day of April, 1997 and ending on the 31st day of March, 2001:
1. Subs. by Act 20 of 2002, s. 34, for "31st day of March, 2002" (w.e.f. 1-4-2003).
Provided that nothing contained in this clause shall apply to a hotel located at a place within the municipal jurisdiction (whether known as a municipality, municipal corporation, notified area committee or a cantonment board or by any other name) of Calcutta, Chennai, Delhi or Mumbai, which has started or starts functioning on or after the 1st day of April, 1997 and before the 31st day of March, 2001:
Provided further that the said hotel is approved by the prescribed authority for the purpose of this clause in accordance with the rules made under this Act and where the said hotel is approved by the prescribed authority before the 31st day of March, 1992, shall be deemed to have been approved by the prescribed authority for the purpose of this section in relation to the assessment year commencing on the 1st day of April, 1991;
(b) thirty per cent. of the profits and gains derived from the business of such hotel as is located in any place other than those mentioned in sub-clause (a) for a period of ten consecutive years beginning from the initial assessment year if such hotel has started or starts functioning at any time during the period beginning on the 1st day of April, 1991 and ending on the 31st day of March, 1995 or beginning on the 1st day of April, 1997 and ending on the 31st day of March, 2001:
Provided that nothing contained in this clause shall apply to a hotel located at a place within the municipal jurisdiction (whether known as a municipality, municipal corporation, notified area committee, town area committee or a cantonment board or by any other name) of Calcutta, Chennai, Delhi or Mumbai, which has started or starts functioning on or after the 1st day of April, 1997 and before the 31st day of March, 2001;
(c) the deduction under clause (a) or clause (b) shall be available only if—
(i) the business of the hotel is not formed by the splitting up, or the reconstruction, of a business already in existence or by the transfer to a new business of a building previously used as a hotel or of any machinery or plant previously used for any purpose;
(ii) the business of the hotel is owned and carried on by a company registered in India with a paid-up capital of not less than five hundred thousand rupees;
(iii) the hotel is for the time being approved by the prescribed authority:
Provided that any hotel approved by the prescribed authority before the 1st day of April, 1999 shall be deemed to have been approved under this sub-section.
1[(7A) The amount of deduction in the case of any multiplex theatre shall be—
(a) fifty per cent of the profits and gains derived, from the business of building, owning and operating a multiplex theatre, for a period of five consecutive years beginning from the initial assessment year in any place:
Provided that nothing contained in this clause shall apply to a multiplex theatre located at a place within the municipal jurisdiction (whether known as a municipality, municipal corporation, notified area committee or a cantonment board or by any other name) of Chennai, Delhi, Mumbai or Kolkata;
1. Ins. by Act 20 of 2002, s. 34 (w.e.f. 1-4-2003).
(b) the deduction under clause (a) shall be allowable only if—
(i) such multiplex theatre is constructed at any time during the period beginning on the 1st day of April, 2002 and ending on the 31st day of March, 2005;
(ii) the business of the multiplex theatre is not formed by the splitting up, or the reconstruction, of a business already in existence or by the transfer to a new business of any building or of any machinery or of plant previously used for any purpose;
(iii) the assessee furnishes alongwith the return of income, the report of an audit in such form and containing such particulars as may be prescribed and duly signed and verified by an accountant, as defined in the Explanation below sub-section (2) of section 288, certifying that the deduction has been correctly claimed.
(7B) The amount of deduction in the case of any convention centre shall be—
(a) fifty per cent of the profits and gains derived, by the assessee from the business of building, owning and operating a convention centre, for a period of five consecutive years beginning from the initial assessment year;
(b) the deduction under clause (a) shall be allowable only if—
(i) such convention centre is constructed at any time during the period beginning on the 1st day of April, 2002 and ending on the 31st day of March, 2005;
(ii) the business of the convention centre is not formed by the splitting up, or the reconstruction, of a business already in existence or by the transfer to a new business of any building or of any machinery or plant previously used for any purpose;
(iii) the assessee furnishes alongwith the return of income, the report of an audit in such form and containing such particulars as may be prescribed, and duly signed and verified by an accountant, as defined in the Explanation below sub-section (2) of section 288, certifying that the deduction has been correctly claimed.]
(8) The amount of deduction in the case of any company carrying on scientific research and development shall be hundred per cent of the profits and gains of such business for a period of five assessment years beginning from the initial assessment year if such company—
(a) is registered in India;
(b) has the main object of scientific and industrial research and development;
(c) is for the time being approved by the prescribed authority at any time before the 1st day of April, 1999.
1[(8A) The amount of deduction in the case of any company carrying on scientific research and development shall be hundred per cent of the profits and gains of such business for a period of ten consecutive assessment years, beginning from the initial assessment year, if such company—
1. Ins. by Act 10 of 2000, s. 39 (w.e.f. 1-4-2001).
(i) is registered in India;
(ii) has its main object the scientific and industrial research and development;
(iii) is for the time being approved by the prescribed authority at any time after the 31st day of March, 2000 but before the[1] [1st day of April, 2007];
(iv) fulfils such other conditions as may be prescribed.]
2[(9) The amount of deduction to an undertaking shall be hundred per cent of the profits for a period of seven consecutive assessment years, including the initial assessment year, if such undertaking fulfils any of the following, namely:—
(i) is located in North-Eastern Region and has begun or begins commercial production of mineral oil before the 1st day of April, 1997;
(ii) is located in any part of India and has begun or begins commercial production of mineral oil on or after the 1st day of April, 1997[3] [but not later than the 31st day of March, 2017]:
4[Provided that the provisions of this clause shall not apply to blocks licensed under a contract awarded after the 31st day of March, 2011 under the New Exploration Licencing Policy announced by the Government of India vide Resolution No. O-19018/22/95-ONG.DO.VL, dated the 10th February, 1999 or in pursuance of any law for the time being in force or by the Central or a State Government in any other manner;]
(iii) is engaged in refining of mineral oil and begins such refining on or after the 1st day of October, 1998[5] [but not later than the 31st day of March, 2012];
6[(iv) is engaged in commercial production of natural gas in blocks licensed under the VIII Round
of bidding for award of exploration contracts (hereafter referred to as "NELP-VIII") under
the New Exploration Licencing Policy announced by the Government of India vide
Resolution No. O-19018/22/95-ONG.DO.VL, dated 10th February, 1999 and begins commercial production of natural gas on or after the 1st day of April, 2009[5] [but not later than the 31st day of March, 2017];
(v) is engaged in commercial production of natural gas in blocks licensed under the IV Round of bidding for award of exploration contracts for Coal Bed Methane blocks and begins commercial production of natural gas on or after the 1st day of April, 2009[5] [but not later than the 31st day of March, 2017].]
Explanation. —For the purposes of claiming deduction under this sub-section, all blocks licensed under a single contract, which has been awarded under the New Exploration Licencing Policy announced by the Government of India vide Resolution No. O-19018/22/95-ONG.DO.VL, dated 10th February, 1999 or has been awarded in pursuance of any law for the time being in force or has been awarded by the Central or a State Government in any other manner, shall be treated as a single "undertaking" . ]
1. Subs. by Act 18 of 2005, s. 27, for "1st day of April, 2005" (w.e.f. 1-4-2006). Earlier substituted by Act 23 of 2004, s. 18
(w.e.f. 1-4-2005), which was substituted by 32 of 2003, s. 39 (w.e.f. 1-4-2004).
2. Subs. by Act 33 of 2009, s. 37, for sub-section (9) (w.e.f. 1-4-2000).
3. Ins. by Act 28 of 2016, s. 43 (w.e.f. 1-4-2017).
4. Ins. by Act 8 of 2011, s. 12 (w.e.f. 1-4-2012).
5. Ins. by Act 33 of 2009, s. 37 (w.e.f. 1-4-2009).
6. Ins. by s. 37 ibid. (w.e.f. 1-4-2010).
1[(10) The amount of deduction in the case of an undertaking developing and building housing projects approved before the[2] [31st day of March, 2008] by a local authority shall be hundred per cent of the profits derived in the previous year relevant to any assessment year from such housing project if,—
(a) such undertaking has commenced or commences development and construction of the housing project on or after the 1st day of October, 1998 and completes such construction,—
(i) in a case where a housing project has been approved by the local authority before the 1st day of April, 2004, on or before the 31st day of March, 2008;
(ii) in a case where a housing project has been, or, is approved by the local authority on or after the 1st day of April, 2004[3] [but not later than the 31st day of March, 2005], within four years from the end of the financial year in which the housing project is approved by the local authority;
3[(iii) in a case where a housing project has been approved by the local authority on or after the 1st day of April, 2005, within five years from the end of the financial year in which the housing project is approved by the local authority.]
Explanation. —For the purposes of this clause,—
(i) in a case where the approval in respect of the housing project is obtained more than once, such housing project shall be deemed to have been approved on the date on which the building plan of such housing project is first approved by the local authority;
(ii) the date of completion of construction of the housing project shall be taken to be the date on which the completion certificate in respect of such housing project is issued by the local authority;
(b) the project is on the size of a plot of land which has a minimum area of one acre:
Provided that nothing contained in clause (a) or clause (b) shall apply to a housing project carried out in accordance with a scheme framed by the Central Government or a State Government for reconstruction or redevelopment of existing buildings in areas declared to be slum areas under any law for the time being in force and such scheme is notified by the Board in this behalf;
(c) the residential unit has a maximum built-up area of one thousand square feet where such residential unit is situated within the city of Delhi or Mumbai or within twenty-five kilometres from the municipal limits of these cities and one thousand and five hundred square feet at[4] [any other place;]
(d) the built-up area of the shops and other commercial establishments included in the housing project does not exceed[5] [three per cent.] of the aggregate built-up area of the housing project or[6] [five thousand square feet], whichever is higher;
1. Subs. by Act 23 of 2004, s. 18, for sub-section (10) (w.e.f. 1-4-2005). As later on amended by Act 10 of 2000, s. 29 (w.e.f. 1-4-2001).
2. Subs. by Act 33 of 2009, s. 37, for "31st day of March, 2007" (w.e.f. 1-4-2009).
3. Ins. by Act 14 of 2010, s. 27 (w.e.f. 1-4-2010).
4. Subs. by Act 33 of 2009, s. 37, for "any other place; and" (w.e.f. 1-4-2010).
5. Subs. by Act 14 of 2010, s. 27, for "five per cent." (w.e.f. 1-4-2010).
6. Subs. by s. 27, ibid ., for "two thousand square feet, whichever is less" (w.e.f. 1-4-2010).
1 [(e) not more than one residential unit in the housing project is allotted to any person not being an individual; and
(f) in a case where a residential unit in the housing project is allotted to a person being an individual, no other residential unit in such housing project is allotted to any of the following persons, namely:—
(i) the individual or the spouse or the minor children of such individual,
(ii) the Hindu undivided family in which such individual is the karta,
(iii) any person representing such individual, the spouse or the minor children of such individual or the Hindu undivided family in which such individual is the karta.]
2[ Explanation. —For the removal of doubts, it is hereby declared that nothing contained in this subsection shall apply to any undertaking which executes the housing project as a works contract awarded by any person (including the Central or State Government).]
(11) Notwithstanding anything contained in clause (iii) of sub-section (2) and sub-sections (3), (4) and (5), the amount of deduction in a case of industrial undertaking deriving profit from the business of setting up and operating a cold chain facility for agricultural produce, shall be hundred per cent of the profits and gains derived from such industrial undertaking for five assessment years beginning with the initial assessment year and thereafter, twenty-five per cent. (or thirty per cent where the assessee is a company) of the profits and gains derived from the operation of such facility in a manner that the total period of deduction does not exceed ten consecutive assessment years (or twelve consecutive assessment years where the assessee is a co-operative society) and subject to fulfilment of the condition that it begins to operate such facility on or after the 1st day of April, 1999 but before the[3] [1st day of April, 2004].
4[(11A) The amount of deduction in a case of 5[an undertaking deriving profit from the business of processing, preservation and packaging of fruits or vegetables or[1] [meat and meat products or poultry or marine or dairy products or from] the integrated business of handling, storage and transportation of foodgrains, shall be hundred per cent of the profits and gains derived from such undertaking for five assessment years beginning with the initial assessment year and thereafter, twenty-five per cent. (or thirty per cent. where the assessee is a company) of the profits and gains derived from the operation of such business in a manner that the total period of deduction does not exceed ten consecutive assessment years and subject to fulfilment of the condition that it begins to operate such business on or after the 1st day of April, 2001]:
1[Provided that the provisions of this section shall not apply to an undertaking engaged in the business of processing, preservation and packaging of meat or meat products or poultry or marine or dairy products if it begins to operate such business before the 1st day of April, 2009.]
6[(11B) The amount of deduction in the case of an undertaking deriving profits from the business of operating and maintaining a hospital in a rural area shall be hundred per cent. of the profits and gains of such business for a period of five consecutive assessment years, beginning with the initial assessment year, if—
(i) such hospital is constructed at any time during the period beginning on the 1st day of October, 2004 and ending on the 31st day of March, 2008;
1. Ins. by Act 33 of 2009, s. 37 (w.e.f. 1-4-2010).
2. Ins. by s. 37, ibid . (w.e.f. 1-4-2001).
3. Subs. by Act 32 of 2003, s. 39, for "31st day of March, 2004" (w.e.f. 1-4-2004).
4. Ins. by Act 14 of 2001, s. 45 (w.e.f. 1-4-2002).
5. Subs. by Act 23 of 2004, s. 18, for "an undertaking deriving profit from" (w.e.f. 1-4-2005).
6. Ins. by s. 18, ibid. (w.e.f. 1-4-2005).
(ii) the hospital has at least one hundred beds for patients;
(iii) the construction of the hospital is in accordance with the regulations, for the time being in force, of the local authority; and
(iv) the assessee furnishes along with the return of income, the report of audit in such form and containing such particulars as may be prescribed, and duly signed and verified by an accountant, as defined in the Explanation below sub-section (2) of section 288, certifying that the deduction has been correctly claimed.
Explanation. —For the purposes of this sub-section, a hospital shall be deemed to have been constructed on the date on which a completion certificate in respect of such construction is issued by the concerned local authority.]
1[(11C) The amount of deduction in the case of an undertaking deriving profits from the business of operating and maintaining a hospital located anywhere in India, other than the excluded area, shall be hundred per cent of the profits and gains derived from such business for a period of five consecutive assessment years, beginning with the initial assessment year, if—
(i) the hospital is constructed and has started or starts functioning at any time during the period beginning on the 1st day of April, 2008 and ending on the 31st day of March, 2013;
(ii) the hospital has at least one hundred beds for patients;
(iii) the construction of the hospital is in accordance with the regulations or bye-laws of the local authority; and
(iv) the assessee furnishes along with the return of income, a report of audit in such form and containing such particulars, as may be prescribed, and duly signed and verified by an accountant, as defined in the Explanation to sub-section (2) of section 288, certifying that the deduction has been correctly claimed.
Explanation. —For the purposes of this sub-section—
(a) a hospital shall be deemed to have been constructed on the date on which a completion certificate in respect of such construction is issued by the local authority concerned;
(b) "initial assessment year" means the assessment year relevant to the previous year in which the business of the hospital starts functioning;
(c) "excluded area" shall mean an area comprising—
(i) Greater Mumbai urban agglomeration;
(ii) Delhi urban agglomeration;
(iii) Kolkata urban agglomeration;
(iv) Chennai urban agglomeration;
(v) Hyderabad urban agglomeration;
(vi) Bangalore urban agglomeration;
1. Ins. by Act 18 of 2008, s. 18 (w.e.f. 1-4-2009).
(vii) Ahmedabad urban agglomeration;
(viii) District of Faridabad;
(ix) District of Gurgaon;
(x) District of Gautam Budh Nagar;
(xi) District of Ghaziabad;
(xii) District of Gandhinagar; and
(xiii) City of Secunderabad;
(d) the area comprising an urban agglomeration shall be the area included in such urban agglomeration on the basis of the 2001 census.]
(12) Where any undertaking of an Indian company which is entitled to the deduction under this section is transferred, before the expiry of the period specified in this section, to another Indian company in a scheme of amalgamation or demerger—
(a) no deduction shall be admissible under this section to the amalgamating or the demerged company for the previous year in which the amalgamation or the demerger takes place; and
(b) the provisions of this section shall, as far as may be, apply to the amalgamated or the resulting company as they would have applied to the amalgamating or the demerged company if the amalgamation or demerger had not taken place.
(13) The provisions contained in sub-section (5) and sub-sections (7) to (12) of section 80-IA shall, so far as may be, apply to the eligible business under this section.
(14) For the purposes of this section,—
1 [(a) "built-up area" means the inner measurements of the residential unit at the floor level, including the projections and balconies, as increased by the thickness of the walls but does not include the common areas shared with other residential units;]
2 [(aa)]"cold chain facility" means a chain of facilities for storage or transportation of agricultural produce under scientifically controlled conditions including refrigeration and other facilities necessary for the preservation of such produce;
3[4[(ab)]"convention centre" means a building of a prescribed area comprising of convention halls to be used for the purpose of holding conferences and seminars, being of such size and number and having such other facilities and amenities, as may be prescribed;]
(b) "hilly area" means any area located at a height of one thousand metres or more above the sea level;
(c) "initial assessment year"—
(i) in the case of an industrial undertaking or cold storage plant or ship or hotel, means the assessment year relevant to the previous year in which the industrial undertaking begins to manufacture or produce articles or things, or to operate its cold storage plant or plants or the cold chain facility or the ship is first brought into use or the business of the hotel starts functioning;
1. Ins. by Act 23 of 2004, s. 18 (w.e.f. 1-4-2005).
2. Clause (a) re-lettered as clause (aa) thereof by s. 18, ibid . (w.e.f. 1-4-2005).
3. Ins. by Act 20 of 2002, s. 34 (w.e.f. 1-4-2003).
4. Clause (aa) re-lettered as clause (ab) thereof by Act 23 of 2004, s. 18 (w.e.f. 1-4-2005).
(ii) in the case of a company carrying on scientific and industrial research and development, means the assessment year relevant to the previous year in which the company is approved by the prescribed authority for the purposes of sub-section (8);
(iii) in the case of an undertaking engaged in the business of commercial production or refining of mineral oil referred to in sub-section (9), means the assessment year relevant to the previous year in which the undertaking commences the commercial production or refining of mineral oil;
1[(iv) in the case of an undertaking engaged 2[in the business of processing, preservation and packaging of fruits or vegetables or] in the integrated business of handling, storage and transportation of foodgrains, means the assessment year relevant to the previous year in which the undertaking begins such business;]
3 [(v) in the case of a multiplex theatre, means the assessment year relevant to the previous year in which a cinema hall, being a part of the said multiplex theatre, starts operating on a commercial basis;
(vi) in the case of a convention centre, means the assessment year relevant to the previous year in which the convention centre starts operating on a commercial basis;]
2[(vii) in the case of an undertaking engaged in operating and maintaining a hospital in a rural area, means the assessment year relevant to the previous year in which the undertaking begins to provide medical services;]
(d) "North-Eastern Region" means the region comprising the States of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim and Tripura;
3[(da) "multiplex theatre" means a building of a prescribed area, comprising of two or more cinema theatres and commercial shops of such size and number and having such other facilities and amenities as may be prescribed;]
(e) "place of pilgrimage" means a place where any temple, mosque, gurdwara, church or other place of public worship of renown throughout any State or States is situated;
- (f) "rural area" means any area other than—
(i) an area which is comprised within the jurisdiction of a municipality (whether known as a municipality, municipal corporation, notified area committee, town area committee or by any other name) or a cantonment board and which has a population of not less than ten thousand according to the preceding census of which relevant figures have been published before the first day of the previous year; or
(ii) an area within such distance not being more than fifteen kilometres from the local limits of any municipality or cantonment board referred to in sub-clause (i), as the Central Government may, having regard to the stage of development of such area including the extent of, and scope for, urbanisation of such area and other relevant considerations specify in this behalf by notification in the Official Gazette;
(g) "small-scale industrial undertaking" means an industrial undertaking which is, as on the last day of the previous year, regarded as a small-scale industrial undertaking under section 11B of the Industries (Development and Regulation) Act, 1951 (65 of 1951).
1. Ins. by Act 14 of 2001, s. 45 (w.e.f. 1-4-2002).
2. Ins. by Act 23 of 2004, s. 18 (w.e.f. 1-4-2005).
3. Ins. by Act 20 of 2002, s. 34 (w.e.f. 1-4-2003).
1[ 80-IBA. Deductions in respect of profits and gains from housing projects. —(1) Where the gross total income of an assessee includes any profits and gains derived from the business of developing and building housing projects, there shall, subject to the provisions of this section, be allowed, a deduction of an amount equal to hundred per cent of the profits and gains derived from such business.
(2) For the purposes of sub-section (1), a housing project shall be a project which fulfils the following conditions, namely:—
(a) the project is approved by the competent authority after the 1st day of June, 2016, but on or before the 31st day of March,[2] [2020];
(b) the project is completed within a period of[3] [ five years] from the date of approval by the competent authority:
Provided that,—
(i) where the approval in respect of a housing project is obtained more than once, the project shall be deemed to have been approved on the date on which the building plan of such housing project was first approved by the competent authority; and
(ii) the project shall be deemed to have been completed when a certificate of completion of project as a whole is obtained in writing from the competent authority;
(c) the[4] [carpet area] of the shops and other commercial establishments included in the housing project does not exceed three per cent. of the aggregate[4] [carpet area];
(d) the project is on a plot of land measuring not less than—
(i) one thousand square metres, where the project is located within the cities of Chennai, Delhi, Kolkata or Mumbai[5] * ; or
(ii) two thousand square metres, where the project is located in any other place;
(e) the project is the only housing project on the plot of land as specified in clause (d);
(f) the[4] [carpet area] of the residential unit comprised in the housing project does not exceed—
(i) thirty square metres, where the project is located within the cities of Chennai, Delhi, Kolkata or Mumbai[5] *; or
(ii) sixty square metres, where the project is located in any other place;
1. Ins. by Act 28 of 2016, s. 44 (w.e.f. 1-4-2017).
2. Subs. by Act 7 of 2019, s. 7, for "2019" (w.e.f. 1-4-2020).
3. Subs. by Act 7 of 2017, s. 37, for "three years" (w.e.f. 1-4-2018).
4. Subs. by 37, ibid., for "built-up area" (w.e.f. 1-4-2018).
5. The words "or within the distance, measured aerially, of twenty-five kilometres from the municipal limits of these cities" omitted by s. 37, ibid., (w.e.f. 1-4-2018).
(g) where a residential unit in the housing project is allotted to an individual, no other residential unit in the housing project shall be allotted to the individual or the spouse or the minor children of such individual;
(h) the project utilises—
(i) not less than ninety per cent of the floor area ratio permissible in respect of the plot of land under the rules to be made by the Central Government or the State Government or the local authority, as the case may be, where the project is located within the cities of Chennai, Delhi, Kolkata or Mumbai[1] * , or
(ii) not less than eighty per cent of such floor area ratio where such project is located in any place other than the place referred to in sub-clause (i); and
(i) the assessee maintains separate books of account in respect of the housing project.
(3) Nothing contained in this section shall apply to any assessee who executes the housing project as a works-contract awarded by any person (including the Central Government or the State Government).
(4) Where the housing project is not completed within the period specified under clause (b) of sub-section (2) and in respect of which a deduction has been claimed and allowed under this section, the total amount of deduction so claimed and allowed in one or more previous years, shall be deemed to be the income of the assessee chargeable under the head "Profits and gains of business or profession" of the previous year in which the period for completion so expires.
(5) Where any amount of profits and gains derived from the business of developing and building housing projects is claimed and allowed under this section for any assessment year, deduction to the extent of such profit and gains shall not be allowed under any other provisions of this Act.
(6) For the purposes of this section,—
2 [(a) "carpet area" shall have the same meaning as assigned to it in clause (k) of section 2 of the Real Estate (Regulation and Development) Act, 2016 (16 of 2016).]
(b) "competent authority" means the authority empowered to approve the building plan by or under any law for the time being in force;
(c) "floor area ratio" means the quotient obtained by dividing the total covered area of plinth area on all the floors by the area of the plot of land;
(d) "housing project" means a project consisting predominantly of residential units with such other facilities and amenities as the competent authority may approve subject to the provisions of this section;
(e) "residential unit" means an independent housing unit with separate facilities for living, cooking and sanitary requirements, distinctly separated from other residential units within the building, which is directly accessible from an outer door or through an interior door in a shared hallway and not by walking through the living space of another household.]
1. The words "or within the distance, measured aerially, of twenty-five kilometres from the municipal limits of these cities" omitted by Act 7 of 2017, s. 37 (w.e.f. 1-4-2018).
2. Subs. by s. 37, ibid ., for clause (a) (w.e.f. 1-4-2018).
1[ 80-IC. Special provisions in respect of certain undertakings or enterprises in certain special category States. —(1) Where the gross total income of an assessee includes any profits and gains derived by an undertaking or an enterprise from any business referred to in sub-section (2), there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction from such profits and gains, as specified in sub-section (3).
(2) This section applies to any undertaking or enterprise,—
(a) which has begun or begins to manufacture or produce any article or thing, not being any article or thing specified in the Thirteenth Schedule, or which manufactures or produces any article or thing, not being any article or thing specified in the Thirteenth Schedule and undertakes substantial expansion during the period beginning—
(i) on the 23rd day of December, 2002 and ending before the[2] [1st day of April, 2007], in any Export Processing Zone or Integrated Infrastructure Development Centre or Industrial Growth Centre or Industrial Estate or Industrial Park or Software Technology Park or Industrial Area or Theme Park, as notified by the Board in accordance with the scheme framed and notified by the Central Government in this regard, in the State of Sikkim; or
(ii) on the 7th day of January, 2003 and ending before the 1st day of April, 2012, in any Export Processing Zone or Integrated Infrastructure Development Centre or Industrial Growth Centre or Industrial Estate or Industrial Park or Software Technology Park or Industrial Area or Theme Park, as notified by the Board in accordance with the scheme framed and notified by the Central Government in this regard, in the State of Himachal Pradesh or the State of Uttaranchal; or
(iii) on the 24th day of December, 1997 and ending before the 1st day of April, 2007, in any Export Processing Zone or Integrated Infrastructure Development Centre or Industrial Growth Centre or Industrial Estate or Industrial Park or Software Technology Park or Industrial Area or Theme Park, as notified by the Board in accordance with the scheme framed and notified by the Central Government in this regard, in any of the North-Eastern States;
(b) which has begun or begins to manufacture or produce any article or thing, specified in the Fourteenth Schedule or commences any operation specified in that Schedule, or which manufactures or produces any article or thing, specified in the Fourteenth Schedule or commences any operation specified in that Schedule and undertakes substantial expansion during the period beginning—
(i) on the 23rd day of December, 2002 and ending before the[2] [1st day of April, 2007], in the State of Sikkim; or
(ii) on the 7th day of January, 2003 and ending before the 1st day of April, 2012, in the State of Himachal Pradesh or the State of Uttaranchal; or
(iii) on the 24th day of December, 1997 and ending before the 1st day of April, 2007, in any of the North-Eastern States.
(3) The deduction referred to in sub-section (1) shall be—
(i) in the case of any undertaking or enterprise referred to in sub-clauses (i) and (iii) of clause (a) or sub-clauses (i) and (iii) of clause (b), of sub-section (2), one hundred per cent. of such profits and gains for ten assessment years commencing with the initial assessment year;
(ii) in the case of any undertaking or enterprise referred to in sub-clause (ii) of clause (a) or sub-clause (ii) of clause (b), of sub-section (2), one hundred per cent of such profits and gains for five assessment years commencing with the initial assessment year and thereafter, twenty-five per cent. (or thirty per cent. where the assessee is a company) of the profits and gains.
1. Ins. by Act 32 of 2003, s. 40 (w.e.f. 1-4-2004).
2. Subs. by Act 22 of 2007, s. 30, for "1st day of April, 2012" (w.e.f. 1-4-2008).
(4) This section applies to any undertaking or enterprise which fulfils all the following conditions, namely:—
(i) it is not formed by splitting up, or the reconstruction, of a business already in existence :
Provided that this condition shall not apply in respect of an undertaking which is formed as a result of the re-establishment, reconstruction or revival by the assessee of the business of any such undertaking as is referred to in section 33B, in the circumstances and within the period specified in that section;
(ii) it is not formed by the transfer to a new business of machinery or plant previously used for any purpose.
Explanation .—The provisions of Explanations 1 and 2 to sub-section (3) of sectopm 80-IA shall apply for the purposes of clause (ii) of this sub-section as they apply for the purposes of clause (ii) of that sub-section.
(5) Notwithstanding anything contained in any other provision of this Act, in computing the total income of the assessee, no deduction shall be allowed under any other section contained in Chapter VIA or in section 10A or section 10B, in relation to the profits and gains of the undertaking or enterprise.
(6) Notwithstanding anything contained in this Act, no deduction shall be allowed to any undertaking or enterprise under this section, where the total period of deduction inclusive of the period of deduction under this section, or under the second proviso to sub-section (4) of section 80-IB or under section 10C, as the case may be, exceeds ten assessment years.
(7) The provisions contained in sub-section (5) and sub-sections (7) to (12) of section 80-IA shall, so far as may be, apply to the eligible undertaking or enterprise under this section.
(8) For the purposes of this section,—
(i) "Industrial Area" means such areas, which the Board, may, by notification in the Official Gazette, specify in accordance with the scheme framed and notified by the Central Government;
(ii) "Industrial Estate" means such estates, which the Board, may, by notification in the Official Gazette, specify in accordance with the scheme framed and notified by the Central Government;
(iii) "Industrial Growth Centre" means such centres, which the Board, may, by notification in the Official Gazette, specify in accordance with the scheme framed and notified by the Central Government;
(iv) "Industrial Park" means such parks, which the Board, may, by notification in the Official Gazette, specify in accordance with the scheme framed and notified by the Central Government;
(v) "Initial assessment year" means the assessment year relevant to the previous year in which the undertaking or the enterprise begins to manufacture or produce articles or things, or commences operation or completes substantial expansion;
(vi) "Integrated Infrastructure Development Centre" means such centres, which the Board, may, by notification in the Official Gazette, specify in accordance with the scheme framed and notified by the Central Government;
(vii) "North-Eastern States" means the States of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland and Tripura;
(viii) "Software Technology Park" means any park set up in accordance with the Software Technology Park Scheme notified by the Government of India in the Ministry of Commerce and Industry;
(ix) "Substantial expansion" means increase in the investment in the plant and machinery by at least fifty per cent of the book value of plant and machinery (before taking depreciation in any year), as on the first day of the previous year in which the substantial expansion is undertaken;
(x) "Theme Park" means such parks, which the Board, may, by notification in the Official Gazette, specify in accordance with the scheme framed and notified by the Central Government.]
1[ 80-ID. Deduction in respect of profits and gains from business of hotels and convention centres in specified area. —(1) Where the gross total income of an assessee includes any profits and gains derived by an undertaking from any business referred to in sub-section (2) (such business being hereinafter referred to as the eligible business), there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction of an amount equal to hundred per cent of the profits and gains derived from such business for five consecutive assessment years beginning from the initial assessment year.
(2) This section applies to any undertaking,—
(i) engaged in the business of hotel located in the specified area, if such hotel is constructed and has started or starts functioning at any time during the period beginning on the 1st day of April, 2007 and ending on[2] [the 31st day of July, 2010]; or
(ii) engaged in the business of building, owning and operating a convention centre, located in the specified area, if such convention centre is constructed at any time during the period beginning on the 1st day of April, 2007 and ending on[2] [the 31st day of July, 2010];
3[(iii) engaged in the business of hotel located in the specified district having a World Heritage Site, if such hotel is constructed and has started or starts functioning at any time during the period beginning on the 1st day of April, 2008 and ending on the 31st day of March, 2013.]
(3) The deduction under sub-section (1) shall be available only if—
(i) the eligible business is not formed by the splitting up, or the reconstruction, of a business already in existence;
(ii) the eligible business is not formed by the transfer to a new business of a building previously used as a hotel or a convention centre, as the case may be;
(iii) the eligible business is not formed by the transfer to a new business of machinery or plant previously used for any purpose.
Explanation .—The provisions of Explanations 1 and 2 to sub-section (3) of section 80-IA shall apply for the purposes of clause (iii) of this sub-section as they apply for the purposes of clause (ii) of that sub-section;
(iv) the assessee furnishes along with the return of income, the report of an audit in such form and containing such particulars as may be prescribed, and duly signed and verified by an accountant, as defined in the Explanation below sub-section (2) of section 288, certifying that the deduction has been correctly claimed.
(4) Notwithstanding anything contained in any other provision of this Act, in computing the total income of the assessee, no deduction shall be allowed under any other section contained in Chapter VIA or section 10AA, in relation to the profits and gains of the undertaking.
(5) The provisions contained in sub-section (5) and sub-sections (8) to (11) of section 80-IA shall, so far as may be, apply to the eligible business under this section.
(6) For the purposes of this section,—
(a) "convention centre" means a building of a prescribed area comprising of convention halls to be used for the purpose of holding conferences and seminars, being of such size and number and having such other facilities and amenities, as may be prescribed;
(b) "hotel" means a hotel of two-star, three-star or four-star category as classified by the Central Government;
1. Ins. by Act 22 of 2007, s. 31 (w.e.f. 1-4-2008).
2. Subs. by Act 14 of 2010, s. 28, for "the 31st day of March, 2010" (w.e.f. 1-4-2011).
3. Ins. by Act 18 of 2008, s. 19 (w.e.f. 1-4-2009).
(c) "initial assessment year"—
(i) in the case of a hotel, means the assessment year relevant to the previous year in which the business of the hotel starts functioning;
(ii) in the case of a convention centre, means the assessment year relevant to the previous year in which the convention centre starts operating on a commercial basis;
(d) "specified area" means the National Capital Territory of Delhi and the districts of Faridabad, Gurgaon, Gautam Budh Nagar and Ghaziabad;]
1 [(e) "specified district having a World Heritage Site" means districts, specified in column (2) of the Table below, of the States, specified in the corresponding entry in column (3) of the said Table:
||1[(e) "specified district having a World Heritage Site" means districts, specified in column (2) of<br>the Table below, of the States, specified in the corresponding entry in column (3) of the said Table:|
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||TABLE|
||S.No.<br>Name of district<br>Name of State<br>(1)<br>(2)<br>(3)<br>1.<br>Agra<br>Uttar Pradesh<br>2.<br>Jalgaon<br>Maharashtra<br>3.<br>Aurangabad<br>Maharashtra<br>4.<br>Kancheepuram<br>Tamil Nadu<br>5.<br>Puri<br>Orissa<br>6.<br>Bharatpur<br>Rajasthan<br>7.<br>Chhatarpur<br>Madhya Pradesh<br>8.<br>Thanjavur<br>Tamil Nadu<br>9.<br>Bellary<br>Karnataka<br>10.<br>South 24 Parganas<br>West Bengal<br>(excluding areas falling within the Kolkata<br>urban agglomeration on the basis of the 2001<br>census)<br>11.<br>Chamoli<br>Uttarakhand<br>12.<br>Raisen<br>Madhya Pradesh<br>13.<br>Gaya<br>Bihar<br>14.<br>Bhopal<br>Madhya Pradesh<br>15.<br>Panchmahal<br>Gujarat<br>16.<br>Kamrup<br>Assam<br>17.<br>Goalpara<br>Assam<br>18.<br>Nagaon<br>Assam<br>19.<br>North Goa<br>Goa<br>20.<br>South Goa<br>Goa<br>21.<br>Darjeeling<br>West Bengal<br>22.<br>Nilgiri<br>Tamil Nadu.]|
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1. Ins. by Act 18 of 2008, s. 19 (w.e.f. 1-4-2009).
1[ 80-IE. Special provisions in respect of certain undertakings in North-Eastern States. —(1) Where the gross total income of an assessee includes any profits and gains derived by an undertaking, to which this section applies, from any business referred to in sub-section (2), there shall be allowed, in computing the total income of the assessee, a deduction of an amount equal to hundred per cent of the profits and gains derived from such business for ten consecutive assessment years commencing with the initial assessment year.
(2) This section applies to any undertaking which has, during the period beginning on the 1st day of April, 2007 and ending before the 1st day of April, 2017, begun or begins, in any of the North-Eastern States,—
(i) to manufacture or produce any eligible article or thing;
(ii) to undertake substantial expansion to manufacture or produce any eligible article or thing;
(iii) to carry on any eligible business.
(3) This section applies to any undertaking which fulfils all the following conditions, namely:—
(i) it is not formed by splitting up, or the reconstruction, of a business already in existence:
Provided that this condition shall not apply in respect of an undertaking which is formed as a result of the re-establishment, reconstruction or revival by the assessee of the business of any such undertaking as referred to in section 33B, in the circumstances and within the period specified in the said section;
(ii) it is not formed by the transfer to a new business of machinery or plant previously used for any purpose.
Explanation .—The provisions of Explanations 1 and 2 to sub-section (3) of section 80-IA shall apply for the purposes of clause (ii) of this sub-section as they apply for the purposes of clause ( ii sub-section.
for the purposes of clause (ii) of this sub-section as they apply for the purposes of clause (ii) of that
(4) Notwithstanding anything contained in any other provision of this Act, in computing the total income of the assessee, no deduction shall be allowed under any other section contained in Chapter VIA or in section 10A or section 10AA or section 10B or section 10BA, in relation to the profits and gains of the undertaking.
(5) Notwithstanding anything contained in this Act, no deduction shall be allowed to any undertaking under this section, where the total period of deduction inclusive of the period of deduction under this section, or under section 80-IC or under the second proviso to sub-section (4) of section 80-IB or under section 10C, as the case may be, exceeds ten assessment years.
(6) The provisions contained in sub-section (5) and sub-sections (7) to (12) of section 80-IA shall, so far as may be, apply to the eligible undertaking under this section.
1. Ins. by Act 22 of 2007, s. 32 (w.e.f. 1-4-2008).
(7) For the purposes of this section,—
(i) "initial assessment year" means the assessment year relevant to the previous year in which the undertaking begins to manufacture or produce articles or things, or completes substantial expansion;
(ii) "North-Eastern States" means the States of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim and Tripura;
(iii) "substantial expansion" means increase in the investment in the plant and machinery by at least twenty-five per cent of the book value of plant and machinery (before taking depreciation in any year), as on the first day of the previous year in which the substantial expansion is undertaken;
(iv) "eligible article or thing" means the article or thing other than the following :—
(a) goods falling under Chapter 24 of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), which pertains to tobacco and manufactured tobacco substitutes;
(b) pan masala as covered under Chapter 21 of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986);
(c) plastic carry bags of less than 20 microns as specified by the Ministry of Environment and Forests vide Notification No. S.O. 705(E), dated the 2nd September, 1999 and S.O. 698(E), dated the 17th June, 2003; and
(d) goods falling under Chapter 27 of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), produced by petroleum oil or gas refineries;
- (v) "eligible business" means the business of,—
(a) hotel (not below two star category);
(b) adventure and leisure sports including ropeways;
(c) providing medical and health services in the nature of nursing home with a minimum capacity of 25 beds;
(d) running an old-age home;
(e) operating vocational training institute for hotel management, catering and food craft, entrepreneurship development, nursing and para-medical, civil aviation related training, fashion designing and industrial training;
(f) running information technology related training centre;
(g) manufacturing of information technology hardware; and
(h) bio-technology.]
80J. [ Deduction in respect of profits and gains from newly established industrial undertakings or ships or hotel business in certain cases ] . — Omitted by the Finance ( No. 2) Act, 1996 (33 of s. 29 ( w.r.e.f . 1-4-1989).
or ships or hotel business in certain cases ] . — Omitted by the Finance ( No. 2) Act, 1996 (33 of 1996),
80JJ. [ Deduction in respect of profits and gains from business of poultry farming ] . — Omitted by the Finance Act, 1997 (26 of 1997), s. 26 ( w.e.f. 1-4-1998).
1[ 80JJA. Deduction in respect of profits and gains from business of collecting and processing of bio-degradable waste. —Where the gross total income of an assessee includes any profits and gains derived from the business of collecting and processing or treating of bio-degradable waste for generating power[2] [or producing bio-fertilizers, bio-pesticides or other biological agents or for producing bio-gas or] making pellets or briquettes for fuel or organic manure, there shall be allowed, in computing the total income of the assessee,[3] [a deduction of an amount equal to the whole of such profits and gains for a period of five consecutive assessment years beginning with the assessment year relevant to the previous year in which such business commences].
4[ 80JJAA. Deduction in respect of employment of new employees. —(1) Where the gross total income of an assessee to whom section 44AB applies, includes any profits and gains derived from business, there shall, subject to the conditions specified in sub-section (2), be allowed a deduction of an amount equal to thirty per cent. of additional employee cost incurred in the course of such business in the previous year, for three assessment years including the assessment year relevant to the previous year in which such employment is provided.
(2) No deduction under sub-section (1) shall be allowed,—
(a) if the business is formed by splitting up, or the reconstruction, of an existing business:
Provided that nothing contained in this clause shall apply in respect of a business which is formed as a result of re-establishment, reconstruction or revival by the assessee of the business in the circumstances and within the period specified in section 33B;
(b) if the business is acquired by the assessee by way of transfer from any other person or as a result of any business reorganisation;
(c) unless the assessee furnishes alongwith the return of income the report of the accountant, as defined in the Explanation to section 288 giving such particulars in the report as may be prescribed.
Explanation .—For the purposes of this section,—
(i) "additional employee cost" means total emoluments paid or payable to additional employees employed during the previous year:
Provided that in the case of an existing business, the additional employee cost shall be nil, if—
(a) there is no increase in the number of employees from the total number of employees employed as on the last day of the preceding year;
1. Ins. by Act 21 of 1998, s. 35 (w.e.f. 1-4-1999). Earlier section 80JJA was inserted by Act 21 of 1979, s. 13 (w.e.f. 1-41980) and later omitted by Act 11 of 1983, s. 27 (w.e.f. 1-4-1984).
2. Subs. by Act 27 of 1999, s. 51, for ", producing bio-gas" (w.e.f. 1-4-2000).
3. Subs. by s. 51, ibid ., for "a deduction from such profits and gains of an amount equal to the whole of such income, or five lakh rupees, whichever is less" (w.e.f. 1-4-2000).
4. Subs. by Act 28 of 2016, s. 45, for section 80JJAA (w.e.f. 1-4-2017). Earlier section 80JJAA was inserted by Act 21 of 1998, s. 36 (w.e.f. 1-4-1999).
(b) emoluments are paid otherwise than by an account payee cheque or account payee bank draft or by use of electronic clearing system through a bank account:
Provided further that in the first year of a new business, emoluments paid or payable to employees employed during that previous year shall be deemed to be the additional employee cost;
(ii) "additional employee" means an employee who has been employed during the previous year and whose employment has the effect of increasing the total number of employees employed by the employer as on the last day of the preceding year, but does not include,—
(a) an employee whose total emoluments are more than twenty-five thousand rupees per month; or
(b) an employee for whom the entire contribution is paid by the Government under the Employees' Pension Scheme notified in accordance with the provisions of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (19 of 1952); or
(c) an employee employed for a period of less than two hundred and forty days during the previous year; or
(d) an employee who does not participate in the recognised provident fund:
1[Provided that in the case of an assessee who is engaged in the business of manufacturing of apparel,[2] [or footwear or leather products] the provisions of sub-clause (c) shall have effect as if for the words "two hundred and forty days", the words "one hundred and fifty days" had been substituted:]
1[Provided further that where an employee is employed during the previous year for a period of less than two hundred and forty days or one hundred and fifty days, as the case may be, but is employed for a period of two hundred and forty days or one hundred and fifty days, as the case may be, in the immediately succeeding year, he shall be deemed to have been employed in the succeeding year and the provisions of this section shall apply accordingly;]
(iii) "emoluments" means any sum paid or payable to an employee in lieu of his employment by whatever name called, but does not include—
(a) any contribution paid or payable by the employer to any pension fund or provident fund or any other fund for the benefit of the employee under any law for the time being in force; and
(b) any lump-sum payment paid or payable to an employee at the time of termination of his service or superannuation or voluntary retirement, such as gratuity, severance pay, leave encashment, voluntary retrenchment benefits, commutation of pension and the like.
(3) The provisions of this section, as they stood immediately prior to their amendment by the Finance Act, 2016, shall apply to an assessee eligible to claim any deduction for any assessment year commencing on or before the 1st day of April, 2016.]
80K. [ Deduction in respect of dividends attributable to profits and gains from new industrial undertakings or ships or hotel business ] . — Omitted by the Finance Act , 1986 (23 of 1986), s ( w.e.f. 1-4-1987).
undertakings or ships or hotel business ] . — Omitted by the Finance Act , 1986 (23 of 1986), s . 19
1. Ins. by Act 47 of 2016, s. 3 (w.e.f. 1-4-2017).
2. Ins. by Act 13 of 2018, s. 29 (w.e.f. 1-4-2019).
80L. [ Deductions in respect of interest on certain securities, dividends, etc ] . — Omitted by the Finance Act , 2005 (18 of 2005), s . 28 ( w.e.f . 1-4-2006).
Source: India Code