YZ Ltd. engaged in the business of manufacture of steel, claimed deduction under section 80-IB on the profits and gains of business, which included transport subsidy, interest subsidy and power subsidy received from the Government and duty drawback receipts. XYZ Ltd. contended that all the above receipts are profits derived from the business of the industrial undertaking and are hence, eligible for deduction under section 80-IB. Is the contention of XYZ Ltd. correct
1 Replies
CA. Sourav Sarkar
(Chartered Accountant )
(24583 Points)
Replied 05 May 2021
Yes 80IB deduction can be claimed in this case based on
case of an industrial undertaking located in an industrial Backward State:
For the initial 5 assessment years – 100% of the profit and gains derived from such undertaking and
Thereafter, for the next 5 assessment years – 25% of the profits and gains derived from such industrial undertaking. (30% in case of a company) (25% for 7 assessment years in case of co-operative society)
ii.In case of an industrial undertaking located in an industrial Backward district:
For the initial 5 assessment years – 100% of the profit and gains derived from such undertaking and
Thereafter, for the next 5 assessment years – 25% of the profits and gains derived from such industrial undertaking. (30% in case of a company) (25% for 7 assessment years in case of co-operative society)
case of an industrial undertaking located in an industrial Backward State:
For the initial 5 assessment years – 100% of the profit and gains derived from such undertaking and
Thereafter, for the next 5 assessment years – 25% of the profits and gains derived from such industrial undertaking. (30% in case of a company) (25% for 7 assessment years in case of co-operative society)
ii.In case of an industrial undertaking located in an industrial Backward district:
For the initial 5 assessment years – 100% of the profit and gains derived from such undertaking and
Thereafter, for the next 5 assessment years – 25% of the profits and gains derived from such industrial undertaking. (30% in case of a company) (25% for 7 assessment years in case of co-operative society)
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