80ib of corporate taxation

7/27/2019 80IB of Corporate taxation

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A presentation on:

Section 80-IB

Profits and gains from certainindustrial undertakings other than

infrastructure development

undertakings

Presented by:

Nikita H. Patel

Enrollment No.:127020592034


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Section 80-IB covers following cases:-

1. Business of an industrial undertaking2. Operation of ship

3. Hotels

4. Industrial Research

5. Production of mineral oil6. Developing and building housing project

7. The business of processing, preservation and packing offruits or vegetables or integrated, handing, storage andtransportation of food grain units.

8. Multiplex theatres9. Conventional centre

10. Operating and maintaining hospitals in rural area.

11. Hospital located in certain area

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Business of an industrial undertaking

Conditions:

1. It is not formed by splitting up, or the reconstruction, of a businessalready in existence.

2. It is not formed by the transfer to a new business of machinery or plantpreviously used for any purpose.

3. It manufactures or produces any article or thing, not being any articleor thing specified in the list in the Eleventh Schedule, or operates one

or more cold storage plant or plants, in any part of India.4. In a case where the industrial undertaking manufactures or producesarticles or things, the undertaking employs ten or more workers in amanufacturing process carried on with the aid of power, or employstwenty or more workers in a manufacturing process carried on withoutthe aid of power.

5. It begins to manufacture or produce, articles or things or to operatesuch plant or plants at any time during the period beginning from the1st day of April, 1991 and ending on the 31st day of March, 1995 orsuch further period as the Central Government may, by notification inthe Official Gazette, specify with reference to any particularundertaking.

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5. Deduction should be claimed in the return of income. Books

of account should be audited.

Amount of deduction:Nature Deduction(% of profit) Duration

Company Non corporate assessee

An industrial

undertaking

100% 100% First 5

years30% 25% Next 5

years

A small scale

industrial

undertaking

30% 25% First 10

years

An industrial

undertaking in

backward districts

of category A

100% 100% First 5

years

30% 25% Next 5

years

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Operation of ship

Conditions:

1. A ship should be owned by an Indian company and is wholly usedfor the purposes of the business carried on by the assessee.

2. It should not have , previous to the date of its acquisition by theIndian company, owned or used in Indian territorial waters by aperson resident in India.

3. If should be brought into use by the Indian company at any timeduring the period beginning on the 1st day of April, 1991 andending on the 31st day of March, 1995.

4. Books of account should be audited.

Amount of deduction:30% of the profits and gains derived from such ship for a period of10 consecutive assessment years including the initial assessmentyear .

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Hotels

Conditions:1. 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;

2. 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;

3. The hotel is for the time being approved by the

prescribed authority.

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Amount of deduction:

50% of the profits and gains derived from the business of such hotel fora period of ten consecutive years beginning from the initial assessmentyear as is located in a hilly area or a rural area or a place of pilgrimage orsuch other place as the Central Government may, having regard to theneed for development of infrastructure for tourism in any place andother relevant considerations, specify by notification in the OfficialGazette and such hotel starts functioning at any time during the periodbeginning on the 1st day of April, 1990 and ending on the 31st day ofMarch, 1994 or beginning on the 1st day of April, 1997 and ending on the31st day of March, 2001.

30% of the profits and gains derived from the business of such hotel as islocated in any place other than those mentioned in sub-clause (a) for a

period of ten consecutive years beginning from the initial assessmentyear if such hotel has started or starts functioning at any time during theperiod beginning on the 1st day of April, 1991 and ending on the 31stday of March, 1995 or beginning on the 1st day of April, 1997 andending on the 31st day of March, 2001

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Industrial Research

Conditions:

1. The taxpayer is a company registered in India.

2. It has the main object of scientific and industrial research anddevelopment.

3. It is for the time being approved by the prescribed authority at

any time before the 1st day of April, 1999.4. Books of account should be audited.

Amount of deduction: 100 % of the profits and gains of such business for a period of 5

assessment years beginning from the initial assessment year. If the time being approved by the prescribed authority after

March 31,2000 but before April 1 ,2007,Deduction is available forthe period of first 10 years.

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Production of mineral oil

Conditions:1. It should be a new undertaking. It should not formed by thetransfer to a new business of machinery or plant previouslyused for any purpose.

2. The undertaking should be located anywhere in India.

3. It should commence production of mineral oil before the 1stday of April, 1997 or engaged in refining of mineral oil duringthe 1st October, 1998 and March 31,2012 or production ofnatural gas on or after April 1,2009.



100% profit is deductible of the first 7 years.

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Developing and building housing projects Conditions:

1. Such undertaking has commenced or commences development andconstruction of the housing project on or after the 1st day of October, 1998 andcompletes such construction,

(i) In a case where a housing project has been approved by the

local authority before the 1st day of April, 2004, on or before the 31st day of

March, 2008;(ii) In a case where a housing project has been, or, is approved by

the local authority on or after the 1st day of April, 2004, within four years from

the end of the financial year in which the housing project is approved by the

local authority.

2. Project is on the size of a plot of land is a minimum area of one acre.

3. The residential unit has a maximum built-up area of 1000 square feet wheresuch residential unit is situated within the city of Delhi or Mumbai or withintwenty-five kilometers from the municipal limits of these cities and one 1500square feet at any other place; and

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4. The built-up area of the shops and other commercial

establishments included in the housing project does notexceed 3% of the aggregate built-up area of the housingproject or 5000 square feet, whichever is less.

5. Not more than 1 residential unit should be allotted to the

same person. If allotee is an individual ,no other residentialunit in the housing project should be allotted to theindividual, his/her spouse, minor children, HUF , etc.individual.



100% of profit of the housing project is deductible

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The business of processing, preservation

and packaging of fruits or vegetables

The amount of deduction in a case of an undertakingderiving profit from the business of processing,preservation and packaging of fruits or vegetables or fromthe integrated business of handling, storage andtransportation of foodgrains, shall be 100% of the profits

and gains derived from such undertaking for 5 assessmentyears beginning with the initial assessment year andthereafter, 25% (or 30% where the assessee is a company)of the profits and gains derived from the operation of suchbusiness in a manner that the total period of deduction

does not exceed ten consecutive assessment years andsubject to fulfillment of the condition that it begins tooperate such business on or after the 1st day of April, 2001.

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Multiplex theatre Conditions:1. Such multiplex theatre is constructed at any time during the

period beginning on the 1st day of April, 2002 and ending on the31st day of March, 2005;

2. The business of the multiplex theatre is not formed by thesplitting up, or the reconstruction, of a business already in

existence or by the transfer to a new business of any building or ofany machinery or of plant previously used for any purpose;

3. The assessee furnishes along with the return of income, thereport of an audit in such form and containing such particulars asmay be prescribed and duly signed and verified by an accountant.

4. Such multiplex theatre is not located at a place within themunicipal jurisdiction of Kolkata, Chennai, Delhi and Mumbai.

Amount of deduction:50% of profit is deductible for the first 5 years.

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Convention centre

Conditions:1. Such convention centre is constructed at any time during theperiod beginning on the 1st day of April, 2002 and ending on the31st day of March, 2005;

2. The business of the convention centre is not formed by thesplitting up, or the reconstruction, of a business already in

existence or by the transfer to a new business of any building or ofany machinery or plant previously used for any purpose;

3. The assessee furnishes along with the return of income, thereport of an audit in such form and containing such particulars asmay be prescribed, and duly signed and verified by an accountant.

Amount of deduction:50% of profit is deductible for the first 5 years.

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Operating and maintaining a hospital

in a rural area Conditions:1. The assessee own undertaking deriving profits from the business of

Operating and maintaining a hospital in a rural area.

2. Such hospital is constructed at any time during the period beginning onthe 1st day of October, 2004 and ending on the 31st day of March,

2008;3. The hospital has at least one hundred beds for patients;

4. The construction of the hospital is in accordance with the regulations,for the time being in force, of the local authority; and

5. The assessee furnishes along with the return of income, the report of

audit in such form and containing such particulars as may beprescribed, and duly signed and verified by an accountant.


100% of profit is deductible for the first 5 years.

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Hospital Locate in certain area

If a few conditions are satisfied, 100% profit is deductible forthe first 5 years ,if the hospital is situated anywhere inIndia(but other than excluded area i.e., Delhi, Mumbai,Kolkata, Chennai, Hyderabad, Bangalore, Ahmedabad,

Faridabad, Gurgaon, Gaziabad, Guatam Budh Nagar,Gandhinagar or Sikandrabad.)

The hospital should start functioning during April 1,2008 andMarch 31,2013.

Deduction should be claimed in the return of income. Booksof account should be audited.

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80ib of corporate taxation

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