Exemption u/s 80-ia

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

09 December 2011 Dear Sir,
We are a newly established undertaking & fulfill the condition of Sec. 80-IA (4). pls.
1) tell me what are the condition for claiming exemption?
2) Whether we are required to obtain certificate of newly established undertaking?
3) Is there any format for applying for that?
4)If we claim exemption u/s 80-IA then whether we are require to pay MAT?
Pls explain provision relating to above in details.
Many- Many Thanks
Shivani

CA MANOJ GUPTA

CA MANOJ GUPTA (Expert)
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10 December 2011 Section 80-IA(4) referrs to many businessess. U have not shared details of business u are engaged. Conditions vary from business to business. There are some sp conditions and some general conditions.
2. and 3 No
4. Yes MAT is payable

CA MANOJ GUPTA
JODHPUR
09828510543

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Querist : Anonymous

Querist : Anonymous (Querist)

10 December 2011 Dear Manoj Sir,
We are in the business of Container Freight Station (CFS) & covered under 80-IA (4) (i) (a) & (b).
Many Listed claiming deduction under the same section.
Sir, Pls let me know the requirement/formalities to claim the deduction in detail...
Awaiting reply
Thanks in advance
Shivani

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Asha Kanta Sharma online

Asha Kanta Sharma

(Expert)
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21 July 2024 Certainly! Let's delve into the details regarding the deduction under Section 80-IA for your newly established undertaking in the business of Container Freight Station (CFS):

### 1. Conditions for Claiming Exemption under Section 80-IA:

Section 80-IA provides deductions for profits and gains derived from certain industrial undertakings or enterprises engaged in infrastructure development. For your CFS business to claim exemption under Section 80-IA, the following conditions generally need to be fulfilled:

- **Nature of Undertaking**: Your undertaking should be engaged in the business of:
- Developing, maintaining, or operating any infrastructure facility (which includes a Container Freight Station).
- Operating and maintaining a Container Freight Station qualifies under Section 80-IA (4)(i)(a) and (b).

- **Commencement**: The operations of the CFS must commence on or after the specified date as notified by the government. The actual date of commencement must be documented and supported by relevant evidence.

- **Profitability**: The undertaking must generate profits or gains from its operations.

- **Compliance**: Ensure compliance with any other conditions specified under Section 80-IA, such as maintaining separate books of accounts for the eligible business, obtaining necessary approvals/licenses, and filing audit reports as required.

### 2. Certificate of Newly Established Undertaking:

- There is no specific requirement to obtain a separate "certificate" of being a newly established undertaking for claiming deduction under Section 80-IA.
- However, you should maintain documentation and records to demonstrate compliance with the conditions of Section 80-IA, including the commencement of operations.

### 3. Formalities for Claiming Deduction:

- **Documentation**: Maintain records and documentation related to the commencement of operations, financial statements, audit reports, and any other relevant documents.
- **Tax Return**: Claim the deduction under Section 80-IA in the income tax return filed by your undertaking. Provide details of the income from the eligible business and the calculation of deduction.

### 4. Minimum Alternate Tax (MAT) Applicability:

- If you claim deduction under Section 80-IA, your undertaking may be subject to Minimum Alternate Tax (MAT) provisions under Section 115JB of the Income Tax Act.
- MAT is applicable if the tax payable under the regular provisions of the Act is less than 18.5% (excluding surcharge and cess) of the book profits of the undertaking.
- MAT provisions need to be considered based on the financial statements and the applicable tax rates.

### Conclusion:

To summarize, Section 80-IA provides a significant tax incentive for newly established undertakings engaged in infrastructure development or specified industries such as Container Freight Stations. Ensure that you comply with the conditions laid down under Section 80-IA, maintain proper documentation, and consult with a tax advisor or chartered accountant for precise application and compliance with tax laws. They can assist in optimizing tax benefits while ensuring adherence to regulatory requirements, including MAT implications if applicable.