Section 147 Income Tax Act 2025
Deductions for income of Offshore Banking Units and Units of International Financial Services Centre.
147. (1) Where the following assessee has any income of the nature referred to in sub-section (3), there shall be allowed a deduction equal to 100% of such income:—
| (a) | | a scheduled bank, or a bank incorporated under the laws of a country outside India, and having an Offshore Banking Unit in a Special Economic Zone; or |
| (b) | | a unit of an International Financial Services Centre. |
(2) The deduction shall be allowed—
| (a) | | for ten consecutive tax years beginning from the relevant tax year in the case of an entity mentioned in sub-section (1)(a); |
| (b) | | for ten consecutive tax years out of fifteen years beginning from the relevant tax year, at the option of an assessee, in the case of an entity mentioned in sub-section (1)(b). |
(3) The income referred to in sub-section (1) shall be the income from—
| (a) | | an Offshore Banking Unit located in a Special Economic Zone; or |
| (b) | | the business activities referred to in section 6(1) of the Banking Regulation Act, 1949 (10 of 1949), with undertakings in a Special Economic Zone or entities that develop, develop and operate, or develop, operate and maintain Special Economic Zone; or |
| (c) | | the approved business activities of any Unit of an International Financial Services Centre set up in a Special Economic Zone; or |
| (d) | | transfer of an asset being, an aircraft or a ship, leased by a unit referred to in clause (c) if such unit commenced its business operations by 31st March, 2030. |
(4) The deduction under this section shall be allowed only if the assessee submits along with the return of income—
| (a) | | a report in the form as may be prescribed, from an accountant certifying the correctness of claim of deduction; and |
| (i) | | permission obtained under section 23(1)(a) of the Banking Regulation Act, 1949 (10 of 1949); or |
| (ii) | | permission or registration obtained under the International Financial Services Centres Authority Act, 2019 (50 of 2019). |
(5) For the purposes of this section,—
| (a) | | “relevant tax year” shall be,— |
| (i) | | in case of an entity mentioned in sub-section (1)(a), the tax year in which permission under section 23(1)(a) of the Banking Regulation Act, 1949 (10 of 1949), or permission or registration under the Securities and Exchange Board of India Act, 1992 (15 of 1992) or any other relevant law was obtained; or |
| (ii) | | in case of an entity mentioned in sub-section (1)(b), the tax year in which permission under section 23(1)(a) of the Banking Regulation Act, 1949 (10 of 1949), or permission or registration under the Securities and Exchange Board of India Act, 1992 (15 of 1992), or permission or registration under the International Financial Services Centre Authority Act, 2019 (50 of 2019) was obtained; |
| (b) | | “Unit” shall have the same meaning as assigned to it in section 2(zc)60 of the Special Economic Zones Act, 2005 (28 of 2005) ; |
| (c) | | “aircraft” and “ship” shall have the meanings respectively assigned to them in Schedule VI (Note 3). |