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Deduction in respect of Income of Farm Producer Companies [Section 80-PA] w.e.f. A.Y. 2019-20

  1. Deduction under Section 80PA is available if the following Conditions are satisfied –

  2. Amount of Deduction under Section 80PA -

1. Deduction under Section 80PA is available if the following Conditions are satisfied –

  1. Assessee is a producer company as defined in section 581A(i) of the Companies Act, 1956 (i.e., a body corporate which deals primarily with the produce of its active members. The objects of the producer company shall relate to all or any of the matters specified in section 581B of the Companies Act, 1956).

  2. Total turnover of the company is less than Rs. 100 crore in any previous year.

  3. Income of the company includes any profit and gains derived from the eligible business. Eligible business for this purpose is –

    1. the marketing of agricultural produce grown by the members; or

    2. the purchase of agricultural implements, seeds, livestock or other articles intended for agriculture for the purpose of supplying them to the members; or

    3. the processing of the agricultural produce of the members.

2. Amount of Deduction under Section 80PA -

If the above conditions are satisfied, the producer company can claim 100% Deduction for the assessment years 2019-20 to 2024-25 in respect of profits and gains of 'Eligible Business'.

(deduction is available only in respect of eligible business given above and not in respect of all businesses specified in section 581B of the Companies Act, 1956).

"eligible business" for purpose of Section 80PA means—

  1. the marketing of agricultural produce grown by the members; or

  2. the purchase of agricultural implements, seeds, livestock or other articles intended for agriculture for the purpose of supplying them to the members; or

  3. the processing of the agricultural produce of the members;

 

"Producer Company " for purpose of Section 80PA means—

As per section 581A(l), "Producer Company" means a body corporate having objects or activities specified in section 581B and registered as Producer Company under this Act

Objects of "Producer Company" [Section 581B]

  1. The objects of the Producer Company shall relate to all or any of the following matters, namely:

    1. production, harvesting, procurement, grading, pooling, handling, marketing, selling, export of primary produce of the Members or import of goods or services for their benefit: Provided that the Producer Company may carry on any of the activities specified in this clause either by itself or through other institution;

    2. processing including preserving, drying, distilling, brewing, vinting, canning and packaging of produce of its Members;

    3. manufacture, sale or supply of machinery, equipment or consumables mainly to its Members;

    4. providing education on the mutual assistance principles to its Members and others;

    5. rendering technical services, consultancy services, training, research and development and all other activities for the promotion of the interests of its Members;

    6. generation, transmission and distribution of power, revitalisation of land and water resources, their use, conservation and communications relatable to primary produce;

    7. insurance of producers or their primary produce;

    8. promoting techniques of mutuality and mutual assistance;

    9. welfare measures or facilities for the benefit of Members as may be decided by the Board;

    10. any other activity, ancillary or incidental to any of the activities referred to in clauses (a) to (i) or other activities which may promote the principles of mutuality and mutual assistance amongst the Members in any other manner;

    11. financing of procurement, processing, marketing or other activities specified in clauses (a) to (j) which include extending of credit facilities or any other financial services to its Members.

  2. Every Producer Company shall deal primarily with the produce of its active Members for carrying out any of its objects specified in this section

Deductions to be made in Computing Total Income [Sections 80A to 80U (Chapter VIA)]

Related Topics...Deductions from Gross Total Income

  1. DEDUCTIONS UNDER 'CHAPTER VI-A' IN RESPECT OF "PAYMENT & INVESTMENT" ARE ALLOWED FROM SECTION 80C TO 80GGC

    Section 80C Section 80CCC Section 80CCD
    Section 80CCG Section 80D Section 80DD
    Section 80DDB Section 80E Section 80EE
    Section 80G Section 80GG Section 80GGA
  2. DEDUCTIONS UNDER 'CHAPTER VI-A' IN RESPECT OF "INCOMES" ARE ALLOWED FROM SECTION 80-IA TO 80U

    Section 80-IA Section 80-IAB Section 80-IAC
    Section 80-IB Section 80-IBA Section 80-IC
    Section 80-ID Section 80-IE Section 80-JJA
    Section 80-JJAA Section 80-LA Section 80-P
    Section 80-PA Section 80-QQB Section 80-RRB
    Section 80-TTA Section 80-TTB Section 80-U
 

 

 
 
 
 
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