Deductions in respect of certain Incomes under Chapter VI-A

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1. [Section 80-IA]: Deduction in respect of Profit and Gains from Industrial Undertaking or Enterprises engaged in infrastructure Development

(1) Eligibility of Deductions U/s 80-IA

The deduction under this Section 80-IA is available to an assessee whose Gross Total Income includes any profits and gains derived by:

(1) Any enterprise carrying on the business of (i) developing, (ii) operating and maintaining, or (iii) developing, operating, maintaining and any infrastructure facility; [Section 80-IA(4)(i)]

(2) An undertaking which is engaged in generation, transmission, distribution of power, etc. [Section 80-IA(4)(iv)]

(3) An undertaking which is engaged in ‘Telecommunication Services’.

(4) An undertaking which is engaged in ‘Industrial Park or Special Economic Zone’

(5) An undertaking which is engaged in ‘Reconstruction of Power Unit’

Deductions in respect of certain Incomes-Chapter-VI-A
Deductions in respect of certain Incomes-Chapter-VI-A

(2). Conditions applicable to all Undertakings / Enterprises to avail Deduction U/s 80-IA.

1. Audit of accounts [Section 80-IA(7)]:

The deduction under section 80-IA from profits and gains derived from an undertaking shall not be admissible unless the accounts of the undertaking for the previous year relevant to the assessment year for which the deduction is claimed have been audited by a chartered accountant and the assessee furnishes, along with his return of income, the report of such audit in Form No. 10CCB duly signed and verified by such accountant.

2. Inter-unit transfer of goods or services [Section 80-IA(8)]:

Where any 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 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 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 goods or services as on that date:

3. Double deduction not allowed [Section 80-IA(9)]:

Where any amount of profits and gains of an 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 the heading “deductions in respect of certain incomes”, and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be.

4. Restriction of excessive profits [Section 80-IA(10)]:

Where it appears to the Assessing Officer that, owing to the (i) close connection between the assessee carrying on the eligible business to which this section applies and any other person, or (ii) 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 maybe reasonably deemed to have been derived therefrom.

5. Power of Central Government to declare that the section shall not apply [Section 80-IA(11)]:

The Central Govt. may, after making such inquiry as it may think fit, direct, by notification in the Official Gazette, that the exemption conferred by this section not apply to any class of industrial undertaking or enterprise with effect from such date as it may specify in the notification.

6. Deduction not to be allowed in cases where return is not filed within the specified time limit [Section 80AC]:

No deduction shall be allowed to the assessee under this section unless he furnishes a return of his income of the relevant assessment year on or before the due date specified u/s 139(1).

(3). Amount and Period of Deduction U/s [Section 80-IA]

100% of profits and gains derived from such business for 10 consecutive assessment years out of 15 years beginning with the year in which undertaking or the enterprise develops and begins to operate any infrastructure facility or generates power or commences transmission or distribution of power or undertakes substantial renovation or modernisation.

However, in case of enterprises engaged in developing, etc of any infrastructure facility other than port, airport, inland waterway or inland port or navigational channel in the sea, the period of 15 years shall be substituted by 20 years.

2. [Section 80-IAB]: Deduction in respect of Profit and Gains from Industrial Undertakings or Enterprises engaged in Development of Special Economic Zone (SEZ).

The provisions are given below –

(A) Conditions – The following conditions should be satisfied—

  1. The taxpayer is a developer of a Special Economic Zone (SEZ).
  2. The gross total income of the taxpayer includes profits and gains derived by an undertaking from any business of developing a special economic zone.
  3. Such special economic zone is notified on or after April 1, 2005 and the development of special economic zone should begin on or before March 31, 2017.

(B) Amount and Period of Deduction Under Section 80-IAB

The deduction shall be allowed of an amount equal to 100% of the profits and gains derived from such business for 10 consecutive assessment years.

The deduction may, at the option of the assessee, be claimed by him for any 10 consecutive assessment years, out of 15 years beginning from the year in which a Special Economic Zone has been notified by the Central Government.

(C) Conditions for Claiming Deduction U/s 80-IAB [Section 80-IAB (3)]:

The provision contained in section 80-IA shall  so far as may be, apply to the eligible business under this section. These provisions relate to following: 

1. Audit of accounts [Section 80-IA(7)]; 

2. Inter unit transfer of goods or services [Section 80-IA(8)]; 

3. Restriction of double deduction [Section 80-IA(9)]; 

4. Restriction of excessive profits [Section 80-IA(10)]; 

5. Power of Central Government to notify undertakings to which section 80-IAB shall not apply [Section  80-IA(11)]; 

6. Deduction not to be allowed where return is not filed within the time limit specified under section 139(1)  [Section 80-AC].

3. [Section 80-IAC]: Deduction in respect of Eligible Business of Eligible Start Up

(1). Conditions to be satisfied to Claim exemption under section 80-IAC(1) [Section 80- IAC(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:

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.

(2). 100% Deduction of Profit from Eligible Business [Section 80-IAC (1)]:

If the above conditions are satisfied, 100% of the profits and gains derived from eligible business is deductible for 3 consecutive assessment years.

However, this deduction may, at the option of the assessee, be claimed by it for any 3 consecutive assessment years out of 5 years (7 years, from the assessment year 2018-19) beginning from the year in which the eligible start-up is incorporated.

The following points should be noted –

  1. The profits and gains from the eligible business shall be calculated as if such eligible business is the only source of income of the assessee during the previous year relevant for the assessment year in which deduction is claimed for the first time and in the next 2 assessment years.
  2. Books of account should be audited and audit report should be submitted along with the return of income.
  3. If the assessee fails to make a claim of deduction available under this section in its return of income, the same will not be allowed as deduction.

(3). Deduction to be allowed for any 3 Consecutive Assessment years out of 5 Years [Section 80-IAC (2)]:

The deduction specified in section 80-IAC (1) may, at the option of the assessee, be claimed by him for any 3 consecutive assessment years out of 5 years beginning from the year in which the eligible start-up is incorporated.

(4). Further Conditions applicable for an assessee Claiming Deduction U/s 80-IAC [Section 80-IAC (4)]:

The provisions contained in section 80-IA (5) and 80-IA (7) to (12) shall, so far as may be, apply to the eligible business under this section. These provisions relate to the following: — 

(i) Computation of profits of eligible business [Section 80-IA (5)] 

(ii) Audit of accounts [Section 80-IA (7)] 

(iii) Inter-unit transfer of goods [Section 80-IA (8)] 

(iv) Restriction on double deduction [Section 80-IA (9)] 

(v) Restriction on excessive profits [Section 80-IA (10)] 

(vi) Power of Central Government to notify undertakings to which section 80-IB will not apply [Section 80- IA (11)]

(5). Deduction Not to be Allowed in cases where Return is not Filed within the Specified Time Limit [Section 80AC]:

No deduction shall be allowed to the assessee under this section unless he furnishes a return of his income of the relevant assessment year on or before the due date specified under section 139(1).

4. Deduction in respect of Profit & Gain from certain Industrial Undertaking other than Infrastructure Development Undertakings [Section 80-IB]

The deduction under this section is available to an assessee whose Gross Total Income includes any profits and gains derived from the business of:

  1. commercial production and refining of mineral oil;
  2. processing, preservation and packaging of fruits or vegetables, meat and meat products or poultry or marine or dairy products;
  3. integrated business of handling, storage and transportation of food grains;
  4. operating and maintaining a hospital located anywhere in India other than the excluded area.

(1) Industrial undertaking Producing or Refining Mineral Oil in the North Eastern Region or in any part of India [Section 80-IB (9)]

Deduction under this section is allowed if an undertaking fulfils any of the following conditions:

  1. It should be a new undertaking. It should not be formed by transfer of machinery or plant previously used for any purpose.
  2. The undertaking should be located anywhere in India.
  3. It should commence production of mineral oil after March 31, 1997 but before April 1, 2017 or refining of mineral oil during October 1, 1998 and March 31, 2012 or production of natural gas (in a specified blocks) on or after April 1, 2009 but before April 1, 2017.

Quantum of Deduction under Section 80-IB(9) :

Deduction shall be available @ 100% of eligible profits for 7 assessment years commencing from the initial assessment year.

Initial Assessment Year:

It means the assessment year relevant to the previous year in which the undertaking commences the commercial production or refining of mineral oil.

(2) Undertaking engaged in the business of processing, preservation and packaging of fruits or vegetables or meat and meat products or poultry or marine or dairy products or integrated business of handling, storage and transportation of food grains [Section 80-IB (11A)]

Essential condition:

  1. It must begin or operate the business of processing, preservation and packaging of fruits or vegetables or integrated business of handling, storage and transportation of food grains on or after 1.4.2001.
  2. The business of processing preservation and packaging of meat and meat products or poultry or marine or dairy products should commence on or after 31.3.2009.

Quantum of Deduction under Section 80-IB(11A) :

 AssesseePeriod of Deduction (commencing from initial assessment year)% of Profit eligible for Deduction
(a)Owned by a CompanyFirst 5 Years100%
  Next 5 Years30%
(b)Owned by any other AssesseeFirst 5 Years100%
  Next 5 Years25%

Initial assessment year:

It means the assessment year relevant to the previous year in which the undertaking begins such business.

(3) Undertaking Operating and Maintaining a Hospital located anywhere in India other than Excluded Area [Section 80-IB (11C)]

The deduction is allowed if the following conditions are satisfied:

  1. the hospital is constructed and has started or starts functioning at any time during the period beginning on 1.4.2008 and ending on 31.3.2013;
  2. the hospital has at least 100 beds for patients;
  3. the construction of the hospital is in accordance with the regulations or bye-laws of the local authority; and
  4. 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.

Quantum and Period of Deduction under Section [Section 80-IB (11C)]:

100% of the profits and gains of such business for a period of 5 consecutive assessment years, beginning with the initial assessment year.

Initial assessment year:

It means the assessment year relevant to the previous year in which the undertaking begins such business.

(4) Further Conditions applicable for all Assessees Claiming Deduction U/s 80-IB [Section 80-IB (13)]:

The provisions contained in section 80-IA (5) and 80-IA(7) to (12) shall, so far as may be, apply to the  eligible business under this section. These provisions relate to the following: — 

(i) Computation of profits of eligible business [Section 80-IA (5)] 

(ii) Audit of accounts [Section 80-IA (7)] 

(iii) Inter-unit transfer of goods [Section 80-IA (8)] 

(iv) Restriction on double deduction [Section 80-IA (9)] 

(v) Restriction on excessive profits [Section 80-IA (10)] 

(vi) Power of Central Government to notify undertakings to which section 80-IB will not apply [Section 80- IA (11)] 

(vii) Deduction not to be allowed in cases where return is not filed within the time limit specified under section 139(1) [Section 80AC].

5. [Section 80-IBA]: Deduction in respect of Profits and Gains from Housing Projects

(1) 100% Deduction of Profit from Housing Projects [Section 80-IBA (1)]:

100% of the profit derived from the aforesaid business is deductible under section 80-IBA provided the project fulfils the conditions mentioned in section 80-IBA (2).

However, deduction is not available to any assessee who executes the housing project as a works contract awarded by any person (including the Central/State Government). When deduction is allowed under this section, deduction to the extent of such profit is not available under any provision of the Act. Deduction should be claimed in the return of income (otherwise deduction is not available).

(2) Conditions to be Fulfilled [Section 80-IBA (2)]:

For the purposes of section 80-IBA (1), a housing project shall be a project which fulfils the following conditions, namely: —

  1. The assessee has profits derived from the business of developing and building a housing project (i.e., a project consisting predominantly of residential units with such other facilities and amenities as the competent authority may specify).
  2. The competent authority has approved the project after June 1, 2016, but on or before March 31, 2019.
  3. The assessee completes the project within a period of 5 years from the date of first approval by the competent authority. 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.
  4. The carpet area of the shops and other commercial establishments included in the housing project does not exceed 3% of the aggregate carpet area.
  5. Size of the plot, area of residential units and minimum utilization of FAR (floor area ratio) should satisfy the criteria given below –
Location of ProjectArea of Plot of Land on which Project is situatedCarpet Area of Residential Units comprised in the Housing ProjectUtilisation of Permissible FAR (Floor Area Ratio)
Project is located within the cities of Chennai, Delhi, Kolkata or MumbaiNot less than 1,000 square metresNot to exceed 30 square metresNot less than 90%
Project is located in any other placeNot less than 2,000 square metresNot to exceed 60 square metresNot less than 80%
  • 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.
  • The assessee should maintain separate books of account in respect of the housing project.

(3) Consequences if the Project is Not Completed within a period of 5 years from the date of Approval [Section 80-IBA (4)]:

Where the housing project is not completed within the period specified under section 80-IBA(2)(b) (i.e. 5 years) 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.

(4) Deduction under any other Provisions of the Act not allowed if the same is claimed under this section [Section 80-IBA (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. [Section 80-IE]: Deduction in respect of certain undertaking in North-Eastern States

Deduction under this section is allowed to an assessee whose gross total income includes any profits and gains derived by an undertaking which fulfils the following conditions: 

(1) It has during the period beginning on 1.4.2007 and ending before 1.4.2017 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. 

(2) It is not formed by splitting up, or the reconstruction, of a business already in existence:  However, this condition shall not apply in respect of an undertaking which is formed as a result of the reestablishment, 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. 

(3) It is not formed by the transfer to a new business of machinery or plant previously used for any purpose.  However, plant and machinery, already used for any purpose, can be transferred to the new industrial undertaking, provided value of such plant and machinery does not exceed 20% of the total value of plant and machinery of the new industrial undertaking.

Quantum of Deduction:

100% of the profits and gains derived from such business for 10 consecutive assessment years commencing with the initial assessment year. 

“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. 

Other Condition of Section 80-IA also applicable [Section 80-IE(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.  These provisions relate to the following:— 

(i) Computation of profits of eligible business [Section 80-IA(5)]; 

(ii) Audit of accounts [Section 80-IA(7)];

 (iii) Inter-unit transfer of goods [Section 80-IA(8)]; 

(iv) Restriction on double deduction [Section 80-IA(9)]; 

(v) Restriction on excessive profits [Section 80-IA(10)];  (vi) Power of Central Government to notify undertakings to which section 80-IC will not apply [Section 80-  IA(11)].

7. [Section 80-JJA]: Deduction In Respect Of Profit And Gains From Business Of Collecting And Processing Of Bio-Degradable Waste.

(1) Conditions [Section 80-JJA]:

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:

  1. generating power, or
  2. producing, bio-fertilizers, bio-pesticides or other biological agents, or
  3. producing bio-gas, or
  4. making pellets or briquettes for fuel, or
  5. organic manure,

a deduction under section 80JJA shall be allowed.

(2) Quantum and Period of Deduction under Section 80-JJA:

100% profit from the above activity is deductible for first 5 years beginning with the assessment year relevant to the previous year in which such business commences.

8. [Section 80-JJAA]: Deduction in Respect of Employment of New Employees

(1) 30% of Additional Employee Cost to be allowed as Deduction for 3 assessment years [Section 80-JJAA (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 section 80JJAA(2), be allowed a deduction of an amount equal to 30% of Additional Employee Cost incurred in the course of such business in the previous year, for 3 assessment years including the assessment year relevant to the previous year in which such employment is provided.

(2) Essential Conditions [Section 80-JJAA (2)]:

No deduction under section 80JJAA (1) shall be allowed,—

  1. if the business is formed by splitting up, or the reconstruction, of an existing business: However, 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;
  2. if the business is acquired by the assessee by way of transfer from any other person or as a result of any business reorganisation;
  3. unless the assessee furnishes alongwith the return of income the report of a chartered accountant giving such particulars in the report as may be prescribed.

9. [Section 80-LA]: Deduction in Respect of Certain Income of Offshore Banking Units and International Financial Services Centre.

(1) Deduction allowed to Schedule Bank or Offshore Banking Unit [Section 80LA (1)]: 

Where the gross total income of an assessee, — 

being a scheduled bank, or, any bank incorporated by or under the laws of a country outside India; and having an Offshore Banking Unit in a Special Economic Zone, includes any income referred to in section 80LA(2), 

there shall be allowed a deduction from such income, of an amount equal to–

–  (a) 100% of such income for 5 consecutive assessment years beginning with the assessment year  relevant to the previous year in which the permission, under clause (a) of sub-section (1) of  section 23 of the Banking Regulation Act, 1949 or permission or registration under the Securities  and Exchange Board of India Act, 1992 or any other relevant law was obtained, and thereafter; 

– (b) 50% of such income for 5 consecutive assessment years.

(2) Deduction allowed to Unit of an International Financial Services Centre [Section 80LA(1A)] 

Where the gross total income of an assessee, — 

being a Unit of an International Financial Services Centre, includes any income referred to in section 80LA (2), 

there shall be allowed, in accordance with and subject to the provisions of this section, a deduction from such income, of an amount equal to— 

100% of such income for any 10 consecutive assessment years, at the option of the assessee, out of  15 years, beginning with the assessment year relevant to the previous year in which the permission,  under section 23(1)(a) of the Banking Regulation Act, 1949 or permission or registration under the  Securities and Exchange Board of India Act, 1992 or any other relevant law was obtained.

(3) Income in respect of which Deduction will be allowed [Section 80LA (2)]:

The deduction will be allowed on account of the following income included in the gross total income of the assessee: 

Any income: 

(a) from an offshore banking unit in a Special Economic Zone; 

(b) from the business, referred to in section 6(1) of the Banking Regulation Act, 1949, with an undertaking located in a Special Economic Zone or any other undertaking which develops, develops and operates or operates and maintains a Special Economic Zone;

(c) from any unit of the International Services Centre from its business for which it has been approved for setting up in such a Centre in a Special Economic Zone.

(4) Conditions to be satisfied [Section 80LA (3)]:

No deduction under this section shall be allowed unless the assessee furnishes along with the return of income, — 

(i) a report of a chartered accountant in Form No. 10CCF, certifying that the deduction has been correctly claimed in accordance with the provisions of this section; and 

(ii) a copy of the permission obtained under section 23(1)(a) of the Banking Regulation Act, 1949 in case of an Offshore Banking Unit.

10. [Section 80-P]: Deduction in Respect of Income of Co-Operative Societies.

Where the assessee is a co-operative society and its gross total income includes the following incomes, a deduction shall be allowed in accordance with and subject to the provisions of this section:

1. Where 100% Deduction is Allowed in respect of income of Co-operative Societies under Section 80P

In the case of the following co-operative societies, full deduction is allowable in respect of following incomes:

(I) Profits attributable to certain Specified Activities [Section 80P(2)(a)]:

100% of the profits, included in Gross Total Income, attributable to any one or more of the following activities are deductible to a co-operative society engaged in:

  1. carrying on the business of banking or providing credit facilities to its members; or
  2. a cottage industry; or
  3. the marketing of the agricultural produce grown by its members; or
  4. the purchase of agricultural implements, seeds, livestock or other articles intended for agriculture for the purpose of supplying them to its members; or
  5. the processing, without the aid of power, of the agricultural produce of its members; or
  6. the collective disposal of the labour of its members; or
  7. fishing or allied activities, that is to say, the catching, curing, processing, preserving, storing or marketing of fish or the purchase of materials and equipment in connection therewith for the purpose of supplying them to its members. [Section 80P(2)(a)]

(II) Profits of certain Primary Co-operative Societies [Section 80P(2)(b)]:

100% of the profits, included in Gross Total Income are deductible in the case of a co-operative society, being a primary society engaged in supplying milk, oilseeds, fruits or vegetables raised or grown by its members to

  1. a federal co-operative society, being a society engaged in the business of supplying milk, oilseeds, fruits, or vegetables, as the case may be; or
  2. the Government or a local authority; or
  3. a Government company as defined in section 617 of the Companies Act, 1956 or a statutory corporation (being a company or corporation engaged in supplying milk, oilseeds, fruits or vegetables, as the case may be, to the public).

(III) Income from Investment with other Co-operative Societies [Section 80P(2)(d)]:

100% of the profits, included in Gross Total Income are deductible in respect of any income by way of interest or dividends derived by the co-operative society from its investments with any other co-operative society.

(IV) Income from Letting of “Godowns or Warehouse” [Section 80P(2)(e)]:

100% of the profits, included in Gross Total Income are deductible in respect of any income derived by the cooperative society from the letting of godowns or warehouses for storage, processing or facilitating the marketing of commodities.

2. Where Deduction is Allowed to a Limited Extent in respect of income of the Co-operative Societies under Section 80P:

In the following cases, the co-operative societies are entitled to deduction to a limited extent: —

(I) Co-operative Society engaged in Other Activities [Section 80P(2)(c)]:

In the case of a cooperative society engaged in activities, other than those specified in I and II of (A) above, either independently of, or in addition to, all or any of the activities so specified, the profits and gains attributable to such other activities upto the maximum limits indicated below are deductible.

  1. where such co-operative society is a consumers’ co-operative society Rs. 1,00,000
  2. in any other case Rs. 50,000.

(II) Entire income by way of Interest on Securities or Income from House Property if Gross Total Income of a Co-operative Society (other than Specified Co-operative Society) does not exceed Rs. 20,000 [Section 80P(2)(f)]:

100% of the income from interest on securities or income from house property shall be allowed as deduction in case of a co-operative society not being

  1. a housing society or
  2. an urban consumer society, or
  3. a society carrying on transport business, or
  4. a society engaged in the performance of any manufacturing operation with the aid of power, provided its gross total income does not exceed Rs. 20,000.

Urban Consumer Co-operative Society means a society for the benefit of the consumers within the limits of municipal corporation, municipality, municipal committee, notified area committee, town area or cantonment.

11. [Section 80-PA]: Deduction in respect of Income of Farm Producer Companies

(1) 100% deduction of profits from eligible business to be allowed to Producer Company having a turnover of less than ₹100 crore [Section 80PA (1)]:

Where the gross total income of an assessee, being a Producer Company having a total turnover of less than ₹100 crore in any previous year, 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 100%, of the profits and gains attributable to such  business for the previous year relevant to an assessment year commencing on or after 1.4.2019, but before  1.4.2025. 

Thus the benefit shall be available for a period of 5 previous years commencing from the previous year 2018-19.

(2) Deduction of Net Income only to be allowed under this section [Section 80PA (2)]:

In a case where the  assessee is entitled to deduction under any other provision of this Chapter also, the deduction under this section  shall be allowed with reference to the income, if any, as referred to in this section included in the gross total  income as reduced by the deductions under such other provision of this Chapter.

12. [Section 80-QQB]: Deduction In respect of Royalty Income, Etc., of Authors of Certain Books other than Text-Books

The Provisions of Section 80QQB are given below : –

(A) Essential Conditions for Claiming Deduction under this Section 80QQB:

1. Resident individual –

The taxpayer is an individual resident in India. He may be an Indian citizen or foreign citizen. He may be resident and ordinarily resident or resident but not ordinarily resident. But he should not be a non-resident in India.

2. Author or joint author –

He is an author or joint author.

3. Literary work –

The book authored by him is work of literary, artistic or scientific nature. However, the “books” shall not include brochures, commentaries, diaries, guides, journals, magazines, newspapers, pamphlets, textbooks for schools, tracts and other publications of similar nature, by whatever name called.

4. Income includes Royalty –

The gross total income of the taxpayer includes the following—

  1. royalty or copyright fees (payable in lump sum or otherwise) in respect of aforesaid book (it also includes advance payment which is not returnable); and
    1. lump sum consideration for transfer (or grant) of any interest in the copyright of the book.

5. Furnishing of Form No. 10CCD –

The taxpayer shall have to obtain a certificate in Form No. 10CCD from the person responsible for paying the income and furnish it electronically along with the return.

6. Return of income –

Deduction under section 80QQB is not available unless it is claimed in the return of income.

(B) Amount of Deduction under Section 80QQB

– If the aforesaid conditions are satisfied, then the amount of deduction is—

  1. Rs. 3,00,000; or
  2. income from royalty as stated above,

whichever is lower.

(C) No Double Deduction be Allowed:

Where a deduction under section 80QQB, for any previous year has been claimed and allowed, no deduction in respect of such income shall be allowed under any other provision of the Act in any assessment year.

(D) Remittance from Abroad –

Where the eligible income is earned outside India, the deduction shall be allowed on so much of the income earned in foreign exchange, which is brought in India within 6 months from the end of previous year (or within extended period as permitted by RBI or competent authority).

Moreover, deduction will not be allowed unless the taxpayer electronically furnishes a certificate in Form No. 10H.

(E) Rate of Royalty not to exceed 15% –

Where the income by way of royalty (or the copyright fee), is not a lump sum consideration (in lieu of all rights of the assessee in the book) so much of the income (before allowing expenses attributable to such income) as is in excess of 15% of the value of such books sold during the previous year, shall be ignored.

13. [Section 80-RRB]: Deduction in Respect of Royalty on Patents

(A) Essential Conditions for Claiming Deduction U/s 80RRB

(1) The deduction is available to an individual who is resident in India and is a patentee. 

(2) The patent should be registered under the Patents Act, 1970. 

(3) His gross total income of the previous year includes royalty in respect of such patent. 

(B) Quantum of Deduction:

100% of such Royalty Income or ₹3,00,000, whichever is less. 

  • However, where a compulsory licence is granted in respect of any patent under the Patents Act, 1970, the income by way of royalty for the purpose of allowing deduction under this section shall not exceed the amount of royalty under the terms and conditions of a licence settled by the Controller under that Act. 
  • Further, where any income is earned from any source outside India, only so much of the income shall be taken  into account for the purpose of this section as is brought into India by, or on behalf of, the assessee in convertible  foreign exchange within a period of 6 months from the end of the previous year in which such income is earned or  within such further period as the competent authority may allow in this behalf. 

(C) Certificates to be furnished:

(1) No deduction under this section shall be allowed unless the assessee furnishes a certificate in the prescribed form (Form No. 10CCD) duly signed by the prescribed authority, along with the return of income, setting forth such particulars as may be prescribed. 

(2) No deduction under this section shall be allowed in respect of any income earned from any source outside India, unless the assessee furnishes a certificate, in the prescribed form from (Form No. 10H) the prescribed authority, along with the return of income in the prescribed manner. 

(D) No Double Deduction:

Where a deduction for any previous year has been claimed and allowed in respect of any income referred to in this section, no deduction in respect of such income shall be allowed under any other provision of the Act in any assessment year.

14. Deduction in respect of Interest on Deposits in Savings Accounts to the Maximum extent of  ₹10,000 [Section 80TTA] 

Where the gross total income of an assessee, being an individual (other than a senior citizen) or a Hindu  undivided family, includes any income by way of interest on deposits (not being time deposits) in a savings  account with— 

(a) a banking company to which the Banking Regulation Act, 1949, applies (including any bank or banking  institution referred to in section 51 of that Act); 

(b) a co-operative society engaged in carrying on the business of banking (including a co-operative land  mortgage bank or a co-operative land development bank); or 

(c) a Post Office as defined in clause (k) of section 2 of the Indian Post Office Act, 1898, 

a deduction of such interest shall be allowed to the maximum extent of ₹10,000 to an assessee (other than the  assessee referred to in section 80TTB i.e. a senior citizen) being an individual or HUF. 

However, where the income referred to in this section is derived from any deposit in a savings account held  by, or on behalf of, a firm, an association of persons or a body of individuals, no deduction shall be allowed under  this section in respect of such income in computing the total income of any partner of the firm or any member of  the association or any individual of the body.

15. [Section 80-TTB]: Deduction in respect of Interest on Deposits in case of Senior Citizens

(1) Senior Citizen to be allowed a Deduction of Rs. 50,000 on account of Interest on Deposits [Section 80TTB (1)]:

Where the gross total income of an assessee, being a senior citizen, includes any income by way of interest on deposits with—

  1. a banking company to which the Banking Regulation Act, 1949, applies (including any bank or banking institution referred to in section 51 of that Act);
  2. a co-operative society engaged in carrying on the business of banking (including a co-operative land mortgage bank or a co-operative land development bank); or
  3. a Post Office as defined in clause (A) of section 2 of the Indian Post Office Act, 1898,

there shall be allowed, in computing the total income of the assessee, a deduction— 

(i) in a case where the amount of such income does not exceed in the aggregate ₹50,000, the whole of such amount; and 

(ii) in any other case, ₹. 50,000. 

(2) No deduction to be allowed if deposit held in the name of partner/member by the firm/AOP [Section 80TTB (2)]:

Where the income referred to in section 80TTB(1) is derived from any deposit held by, or on behalf  of, a firm, an association of persons or a body of individuals, no deduction shall be allowed under this section in  respect of such income in computing the total income of any partner of the firm or any member of the association  or any individual of the body.

16. [Section 80U]: Deduction in Case of a Person with Disability [Section 80U]

In computing the total income of an individual being a person with disability, a deduction under section 80U shall be allowed if certain conditions and satisfied.

(A) Essential Conditions for Claiming Deduction under this Section 80U

  1. The taxpayer is an individual and resident in India.
  2. He suffers 40% or more than 40% of any disability (i.e., blindness, low vision, leprosy-cured, hearing impairment, locomotor disability, mental retardation, mental illness).
  3. The taxpayer shall have a certificate issued by the medical authority. Where the condition of disability requires reassessment, a fresh certificate from the medical authority shall have to be obtained after the expiry of the period mentioned on the original certificate in order to continue to claim the deduction.
  4. He furnishes a certificate issued by the medical authority in the form and manner, as may be prescribed, along with the return of income under section 139, in respect of the assessment year for which the deduction is claimed. Where the condition of disability requires reassessment of its extent after a period stipulated in the aforesaid certificate, no deduction under this section shall be allowed for any assessment year relating to any previous year beginning after the expiry of the previous year during which the aforesaid certificate of disability had expired, unless a new certificate is obtained from the medical authority in the form and manner, as may be prescribed, and a copy thereof is furnished along with the return of income under section 139.

(B) Amount of Deduction Under Section 80U

  1. ₹. 75,000 in case of a Person with Disability.
  2. ₹. 1,25,000 in case of a Person with Severe Disability. (i.e., having disability of 80% or above).

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