Businesswonder.com - Home Page

80I Deduction profits and gains from industrial undertakings after a certain date, etc as per section 80I, chapter via of Income Tax Act

 

If assessee includes any profits and gains derived from an industrial undertaking or a ship or the business of a hotel [or the business of repairs to ocean-going vessels or other powered craft], to which this section applies, there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee.

 

 

 

Provisions in the Income Tax Act related to Section 80I

80I (1) Where the gross total income of an assessee includes any profits and gains derived from an industrial undertaking or a ship or the business of a hotel [or the business of repairs to ocean-going vessels or other powered craft], to which this section applies, 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 from such profits and gains of an amount equal to twenty per cent thereof :

Provided that in the case of an assessee, being a company, the provisions of this sub-section shall have effect [in relation to profits and gains derived from an industrial undertaking or a ship or the business of a hotel] as if for the words "twenty per cent", the words "twenty-five per cent" had been substituted.

(1A) Notwithstanding anything contained in sub-section (1), in relation to any profits and gains derived by an assessee from-

(i) an industrial undertaking which begins to manufacture or produce articles or things or to operate its cold storage plant or plants; or

(ii) a ship which is first brought into use; or

(iii) the business of a hotel which starts functioning,
on or after the 1st day of April, 1990, [but before the 1st day of April, 1991], 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 from such profits and gains of an amount equal to twenty-five per cent thereof :

Provided that in the case of an assessee, being a company, the provisions of this sub-section shall have effect in relation to profits and gains derived from an industrial undertaking or a ship or the business of a hotel as if for the words "twenty-five per cent", the words "thirty per cent" had been substituted.

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

(i) it is not formed3 by the splitting up3, or the reconstruction3, of a business already in existence;

(ii) it is not formed by the transfer4 to a new business of machinery or plant previously used for any purpose;

(iii) it manufactures or produces4 any article4 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, and begins to manufacture or produce articles or things or to operate such plant or plants, at any time within the period of [ten] years next following the 31st day of March, 1981, or such further period as the Central Government may, by notification in the Official Gazette, specify with reference to any particular industrial undertaking;

(iv) in a case where the industrial undertaking manufactures or produces articles or things, the undertaking employs ten or more workers4 in a manufacturing process carried on with the aid of power, or employs twenty or more workers in a manufacturing process carried on without the aid of power :

Provided that the condition in clause (i) shall not apply in respect of any industrial undertaking which is formed as a result of the re-establishment, reconstruction or revival by the assessee of the business of any such industrial undertaking as is referred to in section 33B, in the circumstances and within the period specified in that section :

Provided further that the condition in clause (iii) shall, in relation to a small-scale industrial undertaking, apply as if the words "not being any article or thing specified in the list in the Eleventh Schedule" had been omitted.

Explanation 1.-For the purposes of clause (ii) of this sub-section, any machinery or plant which was used outside India by any person other than the assessee shall not be regarded as machinery or plant previously used for any purpose, if the following conditions are fulfilled, namely :-

(a) such machinery or plant was not, at any time previous to the date of the installation by the assessee, used in India;

(b) such machinery or plant is imported into India from any country outside India; and

(c) no deduction on account of depreciation in respect of such machinery or plant has been allowed or is allowable under the provisions of this Act in computing the total income of any person for any period prior to the date of the installation of the machinery or plant by the assessee.

Explanation 2.-Where in the case of an industrial undertaking, any machinery or plant or any part thereof previously used for any purpose is transferred to a new business and the total value of the machinery or plant or part so transferred does not exceed twenty per cent of the total value of the machinery or plant used in the business, then, for the purposes of clause (ii) of this sub-section, the condition specified therein shall be deemed to have been complied with.

Explanation 3.-For the purposes of this sub-section, "small-scale industrial undertaking" shall have the same meaning as in clause (b) of the Explanation below sub-section (8) of section 80HHA.

(3) This section applies to any ship, where all the following conditions are fulfilled, namely :-
(i) it is owned by an Indian company and is wholly used for the purposes of the business carried on by it;

(ii) it was not, previous to the date of its acquisition by the Indian company, owned or used in Indian territorial waters by a person resident in India; and

(iii) it is brought into use by the Indian company at any time within the period of [ten] years next following the 1st day of April, 1981.

(4) This section applies to the business of any hotel, where all the following conditions are fulfilled, namely :-
(i) the business of the hotel is not formed by the splitting up, or the reconstruction, of a business already in existence or by the transfer to a new business of a building previously used as a hotel or of any machinery or plant previously used for any purpose;

(ii) the business of the hotel is owned and carried on by a company registered in India with a paid-up capital of not less than five hundred thousand rupees;

(iii) the hotel is for the time being approved for the purposes of this sub-section by the Central Government;

(iv) the business of the hotel starts functioning after the 31st day of March, 1981, but before the 1st day of April, [1991].

(4A) This section applies to the business of repairs to ocean-going vessels or other powered craft which fulfils all the following conditions, namely :-

(i) the business is not formed by the 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 is carried on by an Indian company and the work by way of repairs to ocean-going vessels or other powered craft has been commenced by such company after the 31st day of March, 1983, but before the 1st day of April, 1988; and

(iv) it is for the time being approved for the purposes of this sub-section by the Central Government.

(5) The deduction specified in sub-section (1) shall be allowed in computing the total income in respect of the assessment year relevant to the previous year in which the industrial undertaking begins to manufacture or produce articles or things, or to operate its cold storage plant or plants or the ship is first brought into use or the business of the hotel starts functioning [or the company commences work by way of repairs to ocean-going vessels or other powered craft] (such assessment year being hereafter in this section referred to as the initial assessment year) and each of the seven assessment years immediately succeeding the initial assessment year :

Provided that in the case of an assessee, being a co-operative society, the provisions of this sub-section shall have effect as if for the words "seven assessment years", the words "nine assessment years" had been substituted :

Provided further that in the case of an assessee carrying on the business of repairs to ocean-going vessels or other powered craft, the provisions of this sub-section shall have effect as if for the words "seven assessment years", the words "four assessment years" had been substituted:

Provided also that in the case of-
(i) an industrial undertaking which begins to manufacture or produce articles or things or to operate its cold storage plant or plants; or
(ii) a ship which is first brought into use; or
(iii) the business of a hotel which starts functioning,
on or after the 1st day of April, 1990 [but before the 1st day of April, 1991], provisions of this sub-section shall have effect as if for the words "seven assessment years", the words "nine assessment years" had been substituted :
Provided also that in the case of an assessee, being a co-operative society, deriving profits and gains from an industrial undertaking or a ship or a hotel referred to in the third proviso, the provisions of that proviso shall have effect as if for the words "nine assessment years", the words "eleven assessment years" had been substituted.

(6) Notwithstanding anything contained in any other provision of this Act, the profits and gains of an industrial undertaking or a ship or the business of a hotel [or the business of repairs to ocean-going vessels or other powered craft] to which the provisions of sub-section (1) apply shall, for the purposes of determining the quantum of deduction under sub-section (1) for the assessment year immediately succeeding the initial assessment year or any subsequent assessment year, be computed as if such industrial undertaking or ship or the business of the hotel [or the business of repairs to ocean-going vessels or other powered craft] were the only source of income of the assessee during the previous years relevant to the initial assessment year and to every subsequent assessment year up to and including the assessment year for which the determination is to be made.

(7) Where the assessee is a person other than a company or a co-operative society, the deduction under sub-section (1) from profits and gains derived from an industrial undertaking shall not be admissible unless the accounts of the industrial undertaking for the previous year relevant to the assessment year for which the deduction is claimed have been audited by an accountant, as defined in the Explanation below sub-section (2) of section 288, and the assessee furnishes, along with his return of income, the report of such audit in the prescribed form14 duly signed and verified by such accountant.

(8) Where any goods held for the purposes of the business of the industrial undertaking or the hotel or the operation of the ship [or the business of repairs to ocean-going vessels or other powered craft] are transferred to any other business carried on by the assessee, or where any goods held for the purposes of any other business carried on by the assessee are transferred to the business of the industrial undertaking or the hotel or the operation of the ship [or the business of repairs to ocean-going vessels or other powered craft] and, in either case, the consideration, if any, for such transfer as recorded in the accounts of the business of the industrial undertaking or the hotel or the operation of the ship [or the business of repairs to ocean-going vessels or other powered craft] does not correspond to the market value of such goods as on the date of the transfer, then, for the purposes of the deduction under this section, the profits and gains of the industrial undertaking or the business of the hotel or the operation of the ship [or the business of repairs to ocean-going vessels or other powered craft] shall be computed as if the transfer, in either case, had been made at the market value of such goods as on that date :

 

 

 

Provided that where, in the opinion of the [Assessing] Officer, the computation of the profits and gains of the industrial undertaking or the business of the hotel or the operation of the ship [or the business of repairs to ocean-going vessels or other powered craft] in the manner hereinbefore specified presents exceptional difficulties, the [Assessing] Officer may compute such profits and gains on such reasonable basis as he may deem fit.

Explanation.-In this sub-section, "market value", in relation to any goods, means the price that such goods would ordinarily fetch on sale in the open market.

(9) Where it appears to the [Assessing] Officer that, owing to the close connection between the assessee carrying on the business of the industrial undertaking or the hotel or the operation of the ship [or the business of repairs to ocean-going vessels or other powered craft] to which this section applies and any other person, or 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 the business of the industrial undertaking or the hotel or the operation of the ship [or the business of repairs to ocean-going vessels or other powered craft], the [Assessing] Officer shall, in computing the profits and gains of the industrial undertaking or the hotel or the ship [or the business of repairs to ocean-going vessels or other powered craft] for the purposes of the deduction under this section, take the amount of profits as may be reasonably deemed to have been derived therefrom.

(10) The Central Government may, after making such inquiry as it may think fit, direct, by notification in the Official Gazette, that the exemption conferred by this section shall not apply to any class of industrial undertakings with effect from such date as it may specify in the notification.

Income Tax Deductions under Chapter VIA

Section 80A Deductions to be made in computing taxable income as per section 80A, chapter via of Income Tax Act

Section 80AB Any deduction is required to be made or allowed under any section included in Chapter VIA under the heading "C"

Section 80AC Income Tax return needs be filed before due date to get deduction under few sections of VIA

Section 80B meaning of Gross Total Income under Income Tax Act

Section 80C Deduction in respect of LIC Premia, deferred annuity, PF contributions subscription to certain equity shares or debentures, etc.

Section 80CCA Deduction available to assessee in respect of deposits under National Savings Scheme or payment to a deferred annuity plan

Section 80CCB Deduction in respect of investment made under Equity Linked Savings Scheme

Section 80CCC Deduction in respect of contribution to certain pension funds

Section 80CCD Deduction in respect of contribution to pension scheme of Central Government

Section 80CCE Limit on deductions under sections Section 80C, 80CCC and 80CCD

Section 80CCG Deduction in respect of investment made under an equity savings scheme

Section 80D Deduction in respect of health insurance premia

Section 80DD Deduction of of maintenance including medical treatment of a dependant person with disability

Section 80DDB Deduction against Medical Treatment Expenses etc incurred

Section 80E Deduction against interest on loan taken for higher education

Section 80EE Deduction against interest on loan taken for residential house property

Section 80G Deduction against donations to certain funds, charitable institutions, etc

Section 80GG Deductions against rents paid

Section 80GGA Deduction in respect of certain donations for scientific research or rural development

Section 80GGB Deduction in respect of contributions given by companies to political parties

Section 80GGC Deduction against contributions given by any person to political parties

Section 80HH Deduction against profits and gains from newly established industrial undertakings or hotel business in backward areas

Section 80HHA Deduction in respect of profits and gains from newly established small-scale industrial undertakings in certain areas

Section 80HHB Deduction in respect of profits and gains from projects outside India

Section 80HHBA Deduction against profits and gains from housing projects in certain cases

Section 80HHC Deduction in respect of profits retained for export business

Section 80HHD Deduction of earnings in convertible foreign exchange

Section 80HHE Deduction of profits from export of computer software

Section 80HHF Deduction of profits and gains from export or transfer of film software, etc

Section 80I Deduction profits and gains from industrial undertakings after a certain date, etc

Section 80IA Deductions of profits and gains from industrial undertakings or enterprises engaged in infrastructure development, etc

Section 80IAB Deductions in respect of profits and gains by an undertaking or enterprise engaged in development of Special Economic Zone

Section 80IB Deduction of profits and gains from certain industrial undertakings other than infrastructure development undertakings

Section 80IC Special provisions of certain undertakings or enterprises in certain special category States

Section 80ID Deduction of profits and gains from business of hotels and convention centres in specified area

Section 80IE Special provisions in respect of certain undertakings in North-Eastern Statesa>

Section 80JJA Deduction in respect of profits and gains from business of collecting and processing of bio-degradable waste

Section 80JJAA Deduction of employment of new workmen

Section 80LA Deductions of certain incomes of Offshore Banking Units and International Financial Services Centre

Section 80O Deduction of royalties, etc., from certain foreign enterprises

Section 80P Deduction of income of co-operative societies

Section 80Q Deduction of profits and gains from the business of publication of books

Section 80QQA Deduction of professional income of authors of text books in Indian languages

Section 80QB Deduction of royalty income, etc., of authors of certain books other than text-books

Section 80R Deduction of remuneration from certain foreign sources in the case of professors, teachers, etc

Section 80RR Deduction of professional income from foreign sources in certain cases

Section 80RRA Deduction of remuneration received for services rendered outside India

Section 80RRB Deduction of royalty on patents

Section 80TTA Deduction of interest on deposits in savings account

Section 80U Deduction in case of a person with disability

HOME  About Us   Contact Us   Disclaimer   Privacy Policy