Deduction for Profits from Certain Industrial Undertakings [Section 80-IB]
• Deduction is available to assessee deriving profits and gains from Processing, Preservation, and Packaging of specified food items [Section 80-IB(11A)]
• Applicable to processing/preservation/packaging of fruits, vegetables, meat and meat products, poultry, marine, dairy products, and integrated business of handling/storage/transportation of food grains.
• Deduction for 10 years from the year in which it begins its operation.
If assessee is a company, 100% for the first 5 years, 30% for the next 5 years;
Any other assessee – 100% for the first 5 years and 25% in the next 5 years.
• Assessee must commence its operation on or after 01-04-2001; however, if the assessee is engaged in the business of processing, preservation and packaging of meat or meat products or poultry or marine or dairy products, its business must commence on or after 01-04-2009.
• Deduction claim under this section requires books of account audited by a Chartered Accountant. Audit report to be furnished electronically in Form 10CCB one month before the due date of furnishing the return of income under section 139(1).
• Profit must not exceed reasonably expected; AO may recompute income.
• Transfer pricing norms apply to specified domestic transactions.
• Return of income must be filed within the due date under Section 139(1) to claim a deduction.
• Deduction cannot be claimed under any other provision of ‘Chapter VI-A under the heading C’ (Section 80HH to 80RRB). Further, the deduction amount shall not exceed the profits and gains of the eligible business.
• If the undertaking is transferred in the scheme of amalgamation or demerger, the amalgamated or the resulting company is allowed a deduction for the remaining period as if no transfer occurred.
• The undertaking must not be formed by splitting up or reconstructing an existing business, except for re-establishment/revival under Section 33B.
• Such an undertaking must not be formed by the transfer of previously used plant/machinery, except if used outside India before installation and imported (with certain conditions). The condition is deemed fulfilled if the second-hand plant/machinery value does not exceed 20% of the total value.