Let Tax2Win experts file your belated return & claim your TDS
- Simple
- Secure
- Smart
Deduction under section 80-IA : Tax Holiday for enterprises engaged in Infrastructure development, etc Infrastructure of any country is directly linked with the development of the country. Government of India is taking so many initiatives to boost infrastructure of our country. Deduction under section 80-IA is one of that initiative. Now lets understand this tax holiday in detail.
Tax holiday under section 80-IA is available to the assessees who are engaged in providing infrastructure development facility. Under this section, eligible assessee will get tax deduction on profits under business head for specified period of time.There are some specified undertakings are covered. For every eligible undertaking, different conditions, eligibility and amount of deduction given under this section. Let’s understand them in detail.
First of all, let’s understand
Under this section, there are some specified undertaking for which given below is the comprehensive list
Now we will understand eligibility, amount of deduction etc for each undertaking one by one.
Undertaking | Eligibility | Conditions | Amount of Deduction |
---|---|---|---|
Infrastructure facility | An Indian company engaged in infrastructure facility |
|
100% of profit for 10 consecutive A.Y.
*Initial A.Y. should start within 15 A.Y. in which assessee start its operation |
Telecommunication services | An undertaking engaged in providing telecommunication services |
|
First 5 years = 100% of profit
Next 5 years = 30% of profit
*Initial A.Y. should start within 15 A.Y. in which assessee start its operation |
Industrial parks or special economic zone | An undertaking which develops and operates industrial park or special economic zone notified by central government. |
|
100% of profit for 10 consecutive A.Y.
*Initial A.Y. should start within 15 A.Y. in which assessee start its operation |
Power generation, transmission and distribution | An undertaking which is set up in any part of India for the generation or generation & distribution of power. |
|
100% of profit for 10 consecutive A.Y.
*Initial A.Y. should start within 15 A.Y. in which assessee start its operation |
Reconstruction of a power unit | An Indian company engaged in set up for reconstruction or revival of a power generating plant |
|
100% of profit for 10 consecutive A.Y.
*Initial A.Y. should start within 15 A.Y. in which assessee start its operation |
Cross country natural gas distribution network | An Indian company engaged in carrying on business of laying & operation cross - country natural gas distribution network including pipelines & storage facilities being an integral part of such network. |
|
100% of profit for 10 consecutive A.Y.
*Initial A.Y. should start within 15 A.Y. in which assessee start its operation |
1. Who are eligible to claim this deduction ?
The enterprise which is owned by an Indian company who is engaged in providing infrastructure facility.
Infrastructure facility here means :
2.What are the conditions to claim deduction u/s 80-IA ?
There are certain conditions given in the section to claim tax holiday. Here are the insight of conditions :
3. What is the amount of deduction available under section 80-IA ?
Under this section, assessee can claim
100% of the profit is allowed as deduction for 10 consecutive Assessment Years
Now, the very first question comes into the mind is that from which Assessment year assessee is eligible to claim deduction for 10 continuous Assessment Years. We can call first year of deduction ‘Initial Assessment Year’
Deduction need not be taken from the first year of operation,this option is with assessee to decide Initial Assessment Year to claim deduction. But Initial Assessment year should start within a period of 15th Assessment Year in which an assessee start operating infrastructure facility.
4. Other points :
If an eligible undertaking transfer infrastructure facility to another enterprise in that can transferee enterprise is eligible to claim deduction for remaining period.
An undertaking engaged in providing telecommunication services whether basic or cellular, including radio paging, domestic satellite service, network of trunking, broadband network and internet services.
There are certain conditions given in the section to claim tax holiday for telecommunication services. Here are the insight of conditions :
Under this section, assessee can claim
Amount of deduction | Period |
---|---|
100% of profit | For first 5 years |
30% of profit | Next 5 years |
Initial Assessment year to be decided by the assessee at his option but not beyond than 15th Assessment Year in which an assessee start operating telecommunication services.
The enterprise which develops and operates industrial park or special economic zone notified by central government.
There are certain conditions given in the section to claim tax holiday. Here are the insight of conditions :
Enterprise | Year of commencement | Year |
---|---|---|
Special Economic Zone | On or after 01 April, 1997 | Before 31 March, 2005 |
Industrial park | On or after 01 April, 2009 | Before 31 March, 2011 |
Under this section, assessee can claim
100% of the profit is allowed as deduction for 10 consecutive Assessment Years
Initial Assessment year to be decided by the assessee at his option but not beyond than 15th Assessment Year in which an assessee start operating telecommunication services.
An undertaking which is set up in any part of India for the generation or generation & distribution of power.
There are certain conditions given in the section to claim tax holiday for power generation, transmission and distribution. Here are the insight of conditions :
i. Flood, typhoon, hurricane, cyclone, earthquake or other natural calamity, or
ii. Riot or civil disturbance, or
iii. Accidental fire or explosion, or
iv. Enemy action or action taken in combat,
and such business is re-established or revived within 3 years from the end of such previous year.
Under this section, assessee can claim
100% of the profit is allowed as deduction for 10 consecutive Assessment Years from initial Assessment year
An undertaking which is set up for reconstruction or revival of a power generating plant.It should be owned by an Indian Company.
There are certain conditions given in the section to claim tax holiday for reconstruction or revival of a power unit. Here are the insight of conditions :
Particular | Period |
---|---|
Formation with majority equity participation | Before 30 November, 2005 |
Operation begins | Before 31 March, 2011 |
100% of the profit is allowed as deduction for 10 consecutive Assessment Years Deduction need not be taken from the first year of operation,this option is with assessee to decide Initial Assessment Year to claim deduction. But Initial Assessment year should start within a period of 15th Assessment Year in which an assessee start operating infrastructure facility.
An undertaking which is owned by an India Company carrying on business of laying & operation cross - country natural gas distribution network including pipelines & storage facilities being an integral part of such network.
There are certain conditions given to claim tax holiday. Here are the insight of conditions :
Under this section, assessee can claim
100% of the profit is allowed as deduction for 10 consecutive Assessment Years Deduction need not be taken from the first year of operation,this option is with assessee to decide Initial Assessment Year to claim deduction. But Initial Assessment year should start within a period of 15th Assessment Year in which an assessee start operating infrastructure facility.
Let Tax2Win experts file your belated return & claim your TDS