Section 80ID
This query is : Resolved
04 December 2008
Can someone let me know the tax planning options with Section 80-ID if I have an already built old hotel in a specified district with a world heritage site?
06 December 2008
90[Deduction in respect of profits and gains from business of hotels and convention centres in
specified area.
80-ID. (1) Where the gross total income of an assessee includes any profits and gains derived by an
undertaking from any business referred to in sub-section (2) (such business being hereinafter referred to
as the eligible business), there shall, in accordance with and subject to the provisions of this section, be
allowed, in computing the total income of the assessee, a deduction of an amount equal to hundred per
cent of the profits and gains derived from such business for five consecutive assessment years beginning
from the initial assessment year.
(2) This section applies to any undertaking,—
(i) engaged in the business of hotel located in the specified area, if such hotel is constructed and
has started or starts functioning at any time during the period beginning on the 1st day of
April, 2007 and ending on the 31st day of March, 2010; or
(ii) engaged in the business of building, owning and operating a convention centre, located in the
specified area, if such convention centre is constructed at any time during the period beginning
on the 1st day of April, 2007 and ending on the 31st day of March, 2010.
The following clause (iii) shall be inserted after clause (ii) of sub-section (2) of section 80-
ID by the Finance Act, 2008, w.e.f. 1-4-2009 :
(iii) engaged in the business of hotel located in the specified district having a World Heritage Site,
if such hotel is constructed and has started or starts functioning at any time during the period
beginning on the 1st day of April, 2008 and ending on the 31st day of March, 2013.
(3) The deduction under sub-section (1) shall be available only if—
(i) the eligible business is not formed by the splitting up, or the reconstruction, of a business
already in existence;
(ii) the eligible business is not formed by the transfer to a new business of a building previously
used as a hotel or a convention centre, as the case may be;
(iii) the eligible business is not formed by the transfer to a new business of machinery or plant
previously used for any purpose.
Explanation.—The provisions of Explanations 1 and 2 to sub-section (3) of section 80-IA shall
apply for the purposes of clause (iii) of this sub-section as they apply for the purposes of clause
(ii) of that sub-section;
(iv) the assessee furnishes along with the return of income, the report of an audit in such form and
containing such particulars as may be prescribed90a, and duly signed and verified by an
accountant, as defined in the Explanation below sub-section (2) of section 288, certifying that
the deduction has been correctly claimed.
(4) Notwithstanding anything contained in any other provision of this Act, in computing the total income
of the assessee, no deduction shall be allowed under any other section contained in Chapter VIA or
section 10AA, in relation to the profits and gains of the undertaking.
(5) The provisions contained in sub-section (5) and sub-sections (8) to (11) of section 80-IA shall, so far
as may be, apply to the eligible business under this section.
(6) For the purposes of this section,—
(a) “convention centre” means a building of a prescribed area comprising of convention halls to
be used for the purpose of holding conferences and seminars, being of such size and number
and having such other facilities and amenities, as may be prescribed90b;
(b) “hotel” means a hotel of two-star, three-star or four-star category as classified by the Central
Government;
(c) “initial assessment year”—
(i) in the case of a hotel, means the assessment year relevant to the previous year in which the
section80id Page 1 of 2
http://law.incometaxindia.gov.in/DitTaxmann/IncomeTaxActs/2008ITAct/section80ID.htm 06/12/2008
business of the hotel starts functioning;
(ii) in the case of a convention centre, means the assessment year relevant to the previous year
in which the convention centre starts operating on a commercial basis;
(d) “specified area” means the National Capital Territory of Delhi and the districts of Faridabad,
Gurgaon, Gautam Budh Nagar and Ghaziabad.]
The following clause (e) shall be inserted after clause (d) of sub-section (6) of section 80-ID
by the Finance Act, 2008, w.e.f. 1-4-2009 :
(e) “specified district having a World Heritage Site” means districts, specified in column (2) of the
Table below, of the States, specified in the corresponding entry in column (3) of the said Table:
TABLE
S.No. Name of district Name of State
(1) (2) (3)
1. Agra Uttar Pradesh
2. Jalgaon Maharashtra
3. Aurangabad Maharashtra
4. Kancheepuram Tamil Nadu
5. Puri Orissa
6. Bharatpur Rajasthan
7. Chhatarpur Madhya Pradesh
8. Thanjavur Tamil Nadu
9. Bellary Karnataka
10. South 24 Parganas West Bengal
(excluding areas falling within the
Kolkata urban agglomeration
on the basis of the 2001 census)
11. Chamoli Uttarakhand
12. Raisen Madhya Pradesh
13. Gaya Bihar
14. Bhopal Madhya Pradesh
15. Panchmahal Gujarat
16. Kamrup Assam
17. Goalpara Assam
18. Nagaon Assam
19. North Goa Goa
20. South Goa Goa
21. Darjeeling West Bengal
22. Nilgiri Tamil Nadu.
section80id Page 2 of 2
http://law.incometaxindia.gov.in/DitTaxmann/IncomeTaxActs/2008ITAct/section80ID.htm 06/12/2008
specified area.
80-ID. (1) Where the gross total income of an assessee includes any profits and gains derived by an
undertaking from any business referred to in sub-section (2) (such business being hereinafter referred to
as the eligible business), there shall, in accordance with and subject to the provisions of this section, be
allowed, in computing the total income of the assessee, a deduction of an amount equal to hundred per
cent of the profits and gains derived from such business for five consecutive assessment years beginning
from the initial assessment year.
(2) This section applies to any undertaking,—
(i) engaged in the business of hotel located in the specified area, if such hotel is constructed and
has started or starts functioning at any time during the period beginning on the 1st day of
April, 2007 and ending on the 31st day of March, 2010; or
(ii) engaged in the business of building, owning and operating a convention centre, located in the
specified area, if such convention centre is constructed at any time during the period beginning
on the 1st day of April, 2007 and ending on the 31st day of March, 2010.
The following clause (iii) shall be inserted after clause (ii) of sub-section (2) of section 80-
ID by the Finance Act, 2008, w.e.f. 1-4-2009 :
(iii) engaged in the business of hotel located in the specified district having a World Heritage Site,
if such hotel is constructed and has started or starts functioning at any time during the period
beginning on the 1st day of April, 2008 and ending on the 31st day of March, 2013.
(3) The deduction under sub-section (1) shall be available only if—
(i) the eligible business is not formed by the splitting up, or the reconstruction, of a business
already in existence;
(ii) the eligible business is not formed by the transfer to a new business of a building previously
used as a hotel or a convention centre, as the case may be;
(iii) the eligible business is not formed by the transfer to a new business of machinery or plant
previously used for any purpose.
Explanation.—The provisions of Explanations 1 and 2 to sub-section (3) of section 80-IA shall
apply for the purposes of clause (iii) of this sub-section as they apply for the purposes of clause
(ii) of that sub-section;
(iv) the assessee furnishes along with the return of income, the report of an audit in such form and
containing such particulars as may be prescribed90a, and duly signed and verified by an
accountant, as defined in the Explanation below sub-section (2) of section 288, certifying that
the deduction has been correctly claimed.
(4) Notwithstanding anything contained in any other provision of this Act, in computing the total income
of the assessee, no deduction shall be allowed under any other section contained in Chapter VIA or
section 10AA, in relation to the profits and gains of the undertaking.
(5) The provisions contained in sub-section (5) and sub-sections (8) to (11) of section 80-IA shall, so far
as may be, apply to the eligible business under this section.
(6) For the purposes of this section,—
(a) “convention centre” means a building of a prescribed area comprising of convention halls to
be used for the purpose of holding conferences and seminars, being of such size and number
and having such other facilities and amenities, as may be prescribed90b;
(b) “hotel” means a hotel of two-star, three-star or four-star category as classified by the Central
Government;
(c) “initial assessment year”—
(i) in the case of a hotel, means the assessment year relevant to the previous year in which the
section80id Page 1 of 2
http://law.incometaxindia.gov.in/DitTaxmann/IncomeTaxActs/2008ITAct/section80ID.htm 06/12/2008
business of the hotel starts functioning;
(ii) in the case of a convention centre, means the assessment year relevant to the previous year
in which the convention centre starts operating on a commercial basis;
(d) “specified area” means the National Capital Territory of Delhi and the districts of Faridabad,
Gurgaon, Gautam Budh Nagar and Ghaziabad.]
The following clause (e) shall be inserted after clause (d) of sub-section (6) of section 80-ID
by the Finance Act, 2008, w.e.f. 1-4-2009 :
(e) “specified district having a World Heritage Site” means districts, specified in column (2) of the
Table below, of the States, specified in the corresponding entry in column (3) of the said Table:
TABLE
S.No. Name of district Name of State
(1) (2) (3)
1. Agra Uttar Pradesh
2. Jalgaon Maharashtra
3. Aurangabad Maharashtra
4. Kancheepuram Tamil Nadu
5. Puri Orissa
6. Bharatpur Rajasthan
7. Chhatarpur Madhya Pradesh
8. Thanjavur Tamil Nadu
9. Bellary Karnataka
10. South 24 Parganas West Bengal
(excluding areas falling within the
Kolkata urban agglomeration
on the basis of the 2001 census)
11. Chamoli Uttarakhand
12. Raisen Madhya Pradesh
13. Gaya Bihar
14. Bhopal Madhya Pradesh
15. Panchmahal Gujarat
16. Kamrup Assam
17. Goalpara Assam
18. Nagaon Assam
19. North Goa Goa
20. South Goa Goa
21. Darjeeling West Bengal
22. Nilgiri Tamil Nadu.
section80id Page 2 of 2
http://law.incometaxindia.gov.in/DitTaxmann/IncomeTaxActs/2008ITAct/section80ID.htm 06/12/2008
06 December 2008
S.No. Name of district Name of State
(1) (2) (3)
1. Agra Uttar Pradesh
2. Jalgaon Maharashtra
3. Aurangabad Maharashtra
4. Kancheepuram Tamil Nadu
5. Puri Orissa
6. Bharatpur Rajasthan
7. Chhatarpur Madhya Pradesh
8. Thanjavur Tamil Nadu
9. Bellary Karnataka
10. South 24 Parganas West Bengal
(excluding areas falling within the
Kolkata urban agglomeration
on the basis of the 2001 census)
11. Chamoli Uttarakhand
12. Raisen Madhya Pradesh
13. Gaya Bihar
14. Bhopal Madhya Pradesh
15. Panchmahal Gujarat
16. Kamrup Assam
17. Goalpara Assam
18. Nagaon Assam
19. North Goa Goa
20. South Goa Goa
21. Darjeeling West Bengal
22. Nilgiri Tamil Nadu.
section80id Page 2 of 2
http://law.incometaxindia.gov.in/DitTaxmann/IncomeTaxActs/2008ITAct/section80ID.htm 06/12/2008
(1) (2) (3)
1. Agra Uttar Pradesh
2. Jalgaon Maharashtra
3. Aurangabad Maharashtra
4. Kancheepuram Tamil Nadu
5. Puri Orissa
6. Bharatpur Rajasthan
7. Chhatarpur Madhya Pradesh
8. Thanjavur Tamil Nadu
9. Bellary Karnataka
10. South 24 Parganas West Bengal
(excluding areas falling within the
Kolkata urban agglomeration
on the basis of the 2001 census)
11. Chamoli Uttarakhand
12. Raisen Madhya Pradesh
13. Gaya Bihar
14. Bhopal Madhya Pradesh
15. Panchmahal Gujarat
16. Kamrup Assam
17. Goalpara Assam
18. Nagaon Assam
19. North Goa Goa
20. South Goa Goa
21. Darjeeling West Bengal
22. Nilgiri Tamil Nadu.
section80id Page 2 of 2
http://law.incometaxindia.gov.in/DitTaxmann/IncomeTaxActs/2008ITAct/section80ID.htm 06/12/2008
18 December 2008
Sir
This is the section I need to know about the methods by which deduction can be availed by a hotel in existence.
is there a way out?
This is the section I need to know about the methods by which deduction can be availed by a hotel in existence.
is there a way out?
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