Section 80IA, 80IAB, 80IAC and 80IB of Income Tax act, 1961 (A.Y. 2019-20)

Deductions from gross total income u/s 80 related to company assessee

Section 80G, 80GGA and 80GGB of Income Tax act, 1961 (A.Y. 2019-20)

1. Section 80 IA (Profits and Gains from industrial undertaking engaged in Infrastructure development etc.)

Rationale: The existence of infrastructural facilities is very essential for industrial growth and economic development of economy. Recognising the need of establishing and developing infrastructure facilities, Government of India has provided tax incentives for undertakings engaged in the business of Infrastructure development.

Eligible assessee: Industrial undertakings engaged in Eligible business

Rate and period of deduction: A deduction of an amount equal to stated percentage of profits and gains, derived from any eligible business, shall be allowed for stated consecutive assessment years.

Eligible Business: The deduction under this section is available to an assessee whose "Gross Total Income" includes any profit and gain derived from any eligible business. Section 80 IA(4) States the business which qualifies for availing deduction under this section. This deduction is allowed to the undertakings engaged in:-

Category I   --   Infrastructural facilities

Category II   --   Telecommunication services

Category III   --   Industrial parks or SEZ

Category IV   --   Power generation

Category V   --   Undertaking set up for reconstruction of power generating plant

Nature of the Industries	Rate	Period of deduction
1. Infrastructural facility (a.) In case of Port, Airport, Inland waterway or Inland port (b.) In case of other Infrastructure facilities	100% 30%	For 10 consecutive years out of first 15 years For 10 consecutive years out of first 20 years
2. Telecommunication services (whether basic or cellular)	100% 30%	For 5 consecutive years out of first 15 years For next 5 consecutive years out of first 15 years
3. Industrial park or SEZ	100%	For 10 consecutive years out of first 15 years
4. Power generation	100%	For 10 consecutive years out of first 15 years
5. Undertaking setup for Reconstruction or Revival of Power generating plant	100%	For 10 consecutive previous years out of first 15 years

General conditions for claiming deduction u/s 80IA :

1. Profits and gains eligible for deduction shall be computed as if the 'Eligible Business' is the only source of income to the assessee during the previous year relevant to an assessment year.
2. The undertaking claiming deduction under the section is required to get its accounts audited by a chartered accountant. The duly signed and verified audit report is to be attached along with the return of income.
3. Where any goods and services are transferred to any other business of assessee, the consideration shall be recorded in the books of 'Eligible Business' at market value of such goods or services on the date of transfer.
4. The deduction under section 80IA shall be allowed only if the return of income is filed on or before the due date.
5. Where any amount of profits and gains of 'Eligible Business' is claimed as deduction under section 80IA, the same shall not be allowed as deduction under any other section of Chapter VIA.

2. Section 80 IAB (Profits and Gains of SEZ Developers)

Eligible assessee: SEZ Developers

Rate and period of deduction: 100% of the profits for 10 consecutive years out of 15 years, beginning from the year in which Special Economic Zone (SEZ) has been notified by the central government.

3. Section 80 IAC (Eligible Startups)

Eligible assessee: Company and Limited liability partnership (LLP)

Rate and period of deduction: 100% of the profits and gains for 3 consecutive years out of 7 years, beginning from the year of commencement.

4. Section 80 IB (Profits and Gains from new Industrial undertakings)

The deduction under this section is available to an assessee whose Gross Total Income (GTI) includes any profits and gains derived from the business of specified industrial undertakings.

These specified industrial undertakings may be classified as follows:

1. Industrial Undertakings
2. Undertakings engaged in the production or refining of mineral oil or natural gas from blocks allotted under NELP-VIII
3. Undertakings developing and building approved housing projects
4. Undertakings engaged in the integrated business of handling, storage and transportation of food grains
5. Undertakings engaged in operating and maintaining hospitals anywhere in India other than in excluded area

Rate and period of deduction u/s 80IB:-

Undertaking	Rate	Period of deduction
I. Industrial Undertakings ¡.) Industry set up in industrial backward state ¡¡.) Industry set up in a.) A category backward districts b.) B category backward district	100% 30%	For first 5 years For next 5 years
¡¡¡.) Small scale undertakings	30%	For 10 years
II. Undertakings engaged in the production or refining of natural gas	100%	For first 7 years
III. Undertakings developing and building approved housing projects	100%	--
IV. Undertakings engaged in the integrated business of food grains	100% 30%	For first 5 years For next 5 years
V. Setting up of hospitals anywhere in India except in excluded areas	100%	For first 5 years

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