What is section 80-ID ?
This section was introduced from the assessment year 2008-09. This deduction is available to the taxpayers who are engaged in the business of hotel located in a specified area. Also, this deduction is available to the taxpayer who is engaged in the business of building, owning and operating a convention centre located in specified area.
What is covered under the definition of Hotel as per section 80-ID?
Hotel means Hotel of two-star, three-star or four-star category as classified by the Central Government.
What is covered under the definition of Convention Centre as per section 80-ID?
Convention centre" means a building of a prescribed area comprising of convention halls to be used for the purpose of holding conferences and seminars, being of such size and number and having such other facilities and amenities, as may be prescribed.
Which are the areas covered under section 80-ID ?
|S.No.||Type of hotel/ source of income||Specified Area|
|1.||2/3/4 star hotel or convention centre||National capital territory of Delhi and Faridabad, Gurgaon, Gautam Budh Nagar and Ghaziabad|
|2.||2/3/4 star hotel at a world heritage site||Districts of Agra, Jalgaon, Aurangabad, Kancheepuram, Puri, Bharatpur, Chhatarpur, Thanjavur, Bellary, South 24 Parganas (excluding areas falling within the Kolkata Urban Agglomeration), Chamoli, Raisen, Gaya, Bhopal, Panchmahal, Kamrup, Goalpara, Nagaon, North Goa, South Goa, Darjeeling and Nilgiri|
What are the conditions to claim deduction u/s 80-ID ?
1. New Enterprise : It should be a new undertaking. The undertaking should not be formed by splitting up, or reconstruction, of a business already in existence.
Exception : Any undertaking discontinued due to extensive damage or destruction(any building, machinery, plant or furniture owned and used for such business) due to any natural calamity or other unforeseen circumstances such as:-
- 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
2. New plants & Machineries : It should not be formed by transferring old plant & machinery which was previously used for any purpose.Exception :
- Value of old plant & machineries is allowed upto 20% of the total value of plant & machineries.
- Second hand imported machine will also be treated as new plant & machine under this section provided :
- Such plant or machinery was not used in India prior to installation.
- Plant or machinery is imported in India.
- Deduction of depreciation on such plant or machinery has not been/will not be allowed for prior period of installation.
|Type of hotel/ source of income||Construction||Applicable from assessment year|
|2/3/4 star hotel||Constructed & started functioning during 01 April, 2007 and 31 July, 2010||Assessment year 2008-09 onwards|
|2/3/4 star hotel at a world heritage site||Constructed & started functioning during 01 April, 2008 and 31 July, 2013||Assessment year 2009-10 onwards|
|Convention centre||Constructed during 01 April, 2007 and 31 July, 2010||Assessment year 2008-09 onwards|
4. Audit Report :This deduction is allowed if accounts of the assessee has been audited by a CA and audit report has been submitted. Audit report needs to be submitted in Form No. 10CCBBA
5. Income Tax Return :- One of the conditions given in this section is that assessee needs to file his Income Tax Return and should also claim the amount of deduction in return. Moreover, income tax return needs to be filed on time as per section 139(1). You cannot claim deduction in case of belated return.
6. While computing total income of assessee , no deduction shall be allowed under any other section contained in Chapter VIA or section 10AA.
What is the amount of deduction available u/s 80-ID ?
100% of the profit is allowed as deduction for 5 consecutive Assessment Years from Initial Assessment YearInitial Assessment Year here means the assessment year relevant to the previous year in which the business of the hotel starts functioning or convention centre starts operating on a commercial basis.
People also ask
- Deductions under Chapter VI A
- Section 80C: Deductions & Tax Savings Investment Options
- Section 80CCC: Deduction for Contribution towards Pension Funds
- Section 80CCD: Deduction for APY & NPS Contribution
- Section 80CCD(1B) : Deductions & Tax Benefits For NPS Scheme
- Section 80CCG: Rajiv Gandhi Equity Saving Scheme (RGESS)
- Section 80RRB: Deductions on Income from Patent Royalty
- Section 80QQB: Deductions for Royalty Income of Authors
- Section 80D: Deduction for Medical Insurance & Preventive Check-Up
- Section 80E: Deduction for Interest on Education Loan
- Section 80EE: Deduction for Interest on Home Loan
- Section 80DD: Deduction for Expenses on Disabled Dependent
- Section 80DDB: Tax Deduction for Specified Diseases
- Section 80U: Tax Deduction for Disabled Individuals
- Income tax deduction under section 80U
- Section 80GG: Deduction for Rent Amount Paid
- Section 80GGA: Deduction for Donation for Scientific Research/Rural Development
- Section 80GGB: Tax Benefits to Indian Companies on Political Donations
- Section 80GGC: Tax Benefits to Individuals on Political Donations
- Section 80TTA: Deduction on Interest for Savings Accounts
- Section 80TTB: Tax Exemption for Senior Citizens on Interest Income
- Section-80-IA: Deductions For Gains From Industrial Undertakings
- Section 80-IC : Deductions For Certain Undertakings in Special States
- Section 80JJAA: Deduction For Employment of New Employees
- Section 80LA : Deduction For Certain Income Of Offshore Banking Units
- Section 80G: Deduction For Donations To Charitable Institutions
- Tax Benefits on Children Education,Tuition & School Fees Under 80C
- Section 80ID: Deduction For Profit From Business Of hotels
- ULIP – Unit Linked Insurance Plan
- Income Tax on Loan Taken from Friends or Relatives
- PPF - Public Provident Fund - Interest, Benefit & Withdrawals
- Tax Benefits On Insurance Policies – Section 80C
- Taxes can help you reduce the cost of your Home!
- Sukanya Samriddhi Yojana
- ELSS - Equity Linked Saving Schemes
- Bank Fixed Deposit - Interest Rates On Bank FD Accounts
- RBI Tax Savings Bonds - How to Invest in 7.75% Savings Bonds?
- Post Office Fixed Deposit: Interest Rates & Benefits
- NSC - National Savings Certificate - Interest & Benefits
- Post Office Tax Saving Investment Schemes - Plans & Benefits
- Post Office Savings Account - Process & Tax Benefits
- Senior Citizen Saving Scheme
- NPS - National Pension Scheme - Login & Benefits
- Universal Account Number (UAN): Activation & Login
- How to add I-SIP URN number in ICICI Netbanking?