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Tax Holiday- Deduction [Section-80IA] :
(Deductions In Respect Of Profits And Gains From Industrial Undertakings Or Enterprises Engaged In Infrastructure Development.)

 

  6.   Deductions In Respect Of Profits And Gains From Industrial Undertakings Or Enterprises Engaged In Infrastructure Development. [Sec. 80-IA]

            6.1.   Conditions to be satisfied

            6.2.   Amount & Period of Deduction

 

6.1.   CONDITIONS TO BE SATISFIED :         

This section applies to any undertaking which fulfils all the following conditions, namely:-

Deduction under section 80-IA is available only to the following businesses carried on by an undertaking :---

Case 1 :           Ay enterprise carrying on the business of (i) developing or (ii) operating and maintaining any infrastructure facility.

Case 2 :           Any undertaking providing telecommunication services, including radio paging, domestic satellite service, network of trunking, broadband network and internet services on or after the 1-04-1995, but on or before the 31-03- 2005.

Case 3 :           Any undertaking which develops, develops and operates or maintains and operates an industrial park notified by the Central Government for the period beginning on the 1st day of April, 1997 and ending on the 31st day of March, 2006:

Case 4 :           an [undertaking] which,—

(a) is set up in any part of India for the generation or generation and distribution of power if it begins to generate power at any time during the period beginning on the 1st day of April, 1993 and ending on the 31st day of March, 2010;

(b) starts transmission or distribution by laying a network of new transmission or distribution lines at any time during the period beginning on the 1st day of April, 1999 and ending on the 31st day of March, 2010.

(c) undertakes substantial renovation and modernisation of the existing network of transmission or distribution lines at any time during the period beginning on the 1st day of April, 2004 and ending on the 31st day of March, 2010.

Case 5 :           an undertaking owned by an Indian company and set up for reconstruction or revival of a power generating plant, if—

(a)        such Indian company is formed before the 30-11-2005 with majority equity participation by public sector companies for the purposes of enforcing the security interest of the lenders to the company owning the power generating plant and such Indian company is notified before the 31-12-2005 by the Central Government for the purposes of this clause;

(b)        such undertaking begins to generate or transmit or distribute power before the 31-03-2008

Case 6 :           Any undertaking carrying on the business of laying and operating a cross-country natural gas distribution network, including pipelines and storage facilities being an integral part of such network, which fulfils the following conditions, namely:—

(a) it is owned by a company registered in India or by a consortium of such companies or by an authority or a board or a corporation established or constituted under any Central or State Act;

(b) it has been approved by the Petroleum and Natural Gas Regulatory Board and notified by the Central Government in the Official Gazette;

(c) one-third of its total pipeline capacity is available for use on common carrier basis by any person other than the assessee or an associated person;

(d) it has started or starts operating on or after the 1st day of April, 2007; and

(e) any other condition which may be prescribed.

6.2.   AMOUNT & PERIOD OF DEDUCTION :           

Note :   Deductions allowed is 100% or 30% of profits from such eligible business. The profits from such business shall be computed as if such eligible business were the only source of income of the assessee .

Nature of Industry

Assessee

Period of commencement of business

Deductions

Infrastructure facility (new undertaking; agreement with the Central Govt.)

Indian Company

On or after  1-4-1995

100% for 10 years out of 20 years. In case of Port out of 15 years.

Telecommunication (New undertaking: new Plant)

Any undertaking . In case of domestic satellite Indian Company

1-4-95 to 31-3-2005

100% for first 5 years; 30% for next 5 years.

Industrial Park or SEZ

Any undertaking

IP- 1-4-97 to 31-3-2006

.                                               .

SEZ- on or after 1-4-2001 to 31-3-2006

100% for 10 years out of 5 years

Power ( New undertaking : New Plant)

Any undertaking

New netword – 1-4-99 to 31-3-2006

.                                                      .

Substantial renova. – 1-4-2004 to 31-3-2006.

100% for 10 years out of 15 years

It means AY specified by the assessee  at his option to be initial year not falling beyond 15 AY starting from the AY in which the enterprise begins to generates power ; or commences transmission or distribution of  power. However, deduction can be claimed only for 10 consecutive AY falling within a period of 15 AY beginning with the AY in which an assessee begins business.

"infrastructure facility" means–

            (a) a road including toll road, a bridge or a rail system;

(b) a highway project including housing or other activities being an integral part of the highway project :

(c) a water supply project, water treatment system, irrigation project, sanitation and sewerage system or solid waste management system;

            (d) a port, airport, inland waterway.

 

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