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Five-Year Tax Holiday For Hotels In Districts Having A World Heritage Site Section-80 ID

[ Deductions Allowed to NRIs in the Computation of Total Income and Tax Payable]

Section 80-ID of the Income-tax Act provides for a five year tax holiday to new hotels of two, three and four star categories and convention centres. It is a requirement that such hotel must be constructed and has started or starts functioning at any time during the period beginning on the 1st day of April,2007 and ending on the 31st day of March, 2010. Further, such convention centre must be constructed at any time during the above specified period. The tax holiday is available to profits derived from the business of hotels or convention centres for five consecutive assessment years beginning from the initial assessment year. For availing the above benefit, the hotel or convention centre should be located in the specified area. The specified area has been defined as the National Capital Territory of Delhi and the districts of Faridabad, Gurgaon, Gautam Budh Nagar and Ghaziabad.

With a view to promoting tourism and to attract tourists to certain World Heritage Sites in India, the scope of tax benefits available in this section has been extended also to new two-star, three-star or four-star category hotels located in specified districts having a World Heritage Site. Such hotels are required to be constructed and start functioning at any time during the period beginning on the 1st day of April, 2008 and ending on the 31st day of March, 2013. Specified districts having a World Heritage Site are the districts of Agra, Jalgaon, Aurangabad, Kancheepuram, Pun, Bharatpur, Chhatarpur, Thanjavur, Bellany, South 24 Parganas (excluding areas falling within the Kolkata Urban Agglomeration on the basis of the 2001 census), Chamoli, Raisen, Gaya, Bhopal, Panchmahal, Kamrup, Goalpara, Nagaon, North Goa, South Goa, Darjeeling and Nilgiri.

Other conditions:

The deduction will not be allowed for an existing unit split or transferred to a new unit.
The assessee should submit along with the return an audit report in such form as prescribed.
The convention centres should have the minimum area and facilities as prescribed.
The CBDT has prescribed the audit report form and the specifications of the convention centres. A new Rule 18DE has been inserted in the Income Tax Rules. The prescribed specifications for the convention centre are that it should have a minimum covered plinth area of 25000 sq.mtrs, should have a minimum seating capacity of 3000 and should have at least 10 convention halls. In addition the facilities mandatorily required are:

  1. Modern public address system, slide and power point projection system and LCD projector or Video screening facility. (What is a power point projection system? Power point is a Microsoft programme - the LCD projector can easily be used for this.)

  2. Documentation centre with computers and printers, telephone with STD/ISD facilities, E-mail, photocopy and scanning facility along with trained operators to provide these facilities.

  3. Completely centrally air-conditioned.

  4. Adequate parking facility and other public conveniences as per tile local building regulations and should also fulfill all local building regulations in respect of fire and safety.

In computing the total income of the assessee, no deduction shall be allowed under any other section contained in Chapter VIA or section bAA, in relation to the profits and gains of the undertaking.

No further deduction allowed under section 80IA/80IB/80IC/10A or 10B A new form No. 10CCBBA has been prescribed for filing the audit report.

Deductions Allowed to NRIs in the Computation of Total Income and Tax Payable
1.Tax Benefit Regarding Life Insurance Premium, PPF Contributions, Nscs, Tuition Fees, etc.
2. Deduction For Donations To Certain Funds And Charitable Institutions
3. Deduction In Respect Of Profits And Gains From A New Industrial Undertaking Or Infrastructural Facility
4. Five-Year Tax Holiday To Hospitals At Certain Locations Sec. 80-1B (IIC)
5. Tax Holiday To Enterprises Providing Telecommunication Services, Industrial Parks, New Hotels And Having Commercial Production Of Mineral Oil
6. Five Year Tax Holiday For New Industrial Undertakings In Industrially Backward Areas & Districts
7. Liberalisation Of Tax Holiday Provision For Infrastructure, Telecom Services, Power Generation, Special Economic Zones, Industrial Parks, etc. [ Section 80-IA]
8. Ten Year Tax Holiday In Respect Of Certain Undertakings In Himachal Pradesh, Sikkim, Uttaranchal And N.E. States Section 80-IC
9. Five-Year Tax Holiday For Hotels In Districts Having A World Heritage Site Sec. 801D
10. Tax Holiday For Hotel And Convention Centres In NCT Of Delhi And Other Areas Section 801D
11. Deduction’ In Respect Of Medical Insurance Premia Section 80D
12. Additional Deduction For Health Insurance Premium Paid For Parents Section 80D
13. Deduction Of Repayment Of Loan For Higher Studies Section 80E
14. Deduction In Respect Of Certain Undertakings In North Eastern States
15. Other Deductions Like Depreciation, Etc. To Nonresident Indians

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