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Tax Holiday- Deduction [Section-80-IB] :
(Deduction In Respect Of Profits And Gains From Certain Industrial Undertakings Other Than Infrastructure Development Undertaking)

3.     Deduction In Respect Of Profits And Gains From Certain Industrial Undertakings Other Than Infrastructure Development Undertaking. [Sec. 80-IB]

            1.   Conditions to be satisfied

            2.   Amount & Period of Deduction

 

Where the Gross Total Income of an assessee includes any profits and gains derived from any business of an Industrial undertaking or a Hotel or operation of a Ship, or developing , maintaining and operating any infra structural facility or scientific and industrial research and development assessee shall be allowed a deduction while computing total income.

1.   CONDITIONS TO BE SATISFIED :         

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

(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:

(iv)       Manufacture or production should be started within a stipulated time limit.

(v)        it should employ 10/20 workers.

(vi)       Return of Income should be submitted on or before due date of submission of return of income.

2.   AMOUNT OF DEDUCTION :                    

If the aforesaid conditions are satisfied , the deduction u/s 80 IB may be computed as under

RATES OF DEDUCTION U/S 80-IB 

Undertaking

When Set up

Rate

Period

Company

Others

I. Industrial Undertaking [ Section 80-IB(2)]

(a) Industry set up in Industrial backward state.

1-4-93 to 31-3-2004

100%

30%

100%

25%

For first 5 years

For next 5 years

(b) Industry set up in North Eastern States

1.10.93 to 31.3.2004

100%

30%

100%

25%

For first 5 years

For next 5 years

(c) Industry set up in

A. category backward district

 

B. category backward district

 

 

1.10.94 to 31.3.2004

1.10.94 to 31.3.2002

 

1.10.94 to 31.3.2004

1.10.94 to 31.3.2002

 

 

100%

30%

 

100%

30%

 

 

100%

25%

 

100%

25%

 

For first 5 years

For next 5 years

 

For first 5 years

For next 5 years

(d) Other Industries

A. in small sector co-op.

 

B. any other in priority sector

1.4.91 to 31.3.2002

 

1.4.91 to 31.3.1995

30%

 

30%

25%

 

25%

12 years for co op. other 10 years

----do----

II. Production of Mineral oil in North Eastern region or any where in India         [ 80-IB(4E)]

From 1.4.97 onwards

100%

100%

First 7 years

III. Refining of mineral oil in North Eastern region or any where in India         [80-IB(4E)]

From 1.10.98 onwards

100%

100%

First 7 years

IV. Construction and development of housing project of residential units whose area does not exceed 1,000 sq. feet.

From 1.10.98 , Project must be completed by 31.3.2003

100%

100%

 

V. Profit from an undertaking engaged in the integrated business of handling, storage and transportation of food grains [ 80-IB(11A)]

From 1.4.2001 onwards

100%

30%

100%

25%

For first 5 years

For next 5 years

VI. Setting up of multiplex theaters.

1.4.2002 to 31.3.2005

50%

50%

For first 5 years

VII. Setting up of convention center

1.4.2002 to 31.3.2005

50%

50%

For first 5 years

VIII. Hotel :

(a) in hilly area or in rural areas outside municipal limits.

1.4.90 to 31.3.1994 and

1.4.97 to 31.3.2001

50%

 

50%

Nil

 

Nil

For first 10 years

 

For first 10 years

(b) at place other than Clacutta, Chennai, Mumbai & Delhi

1.4.97 to 31.3.2001

50%

Nil

For first 10 years

(c) Any where in India

1.4.91 to 31.3.1995

30%

Nil

For first 10 years

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