Section – 80-IC : Special provisions in respect of certain undertakings or enterprises in certain special category States
February 28, 2018
Section – 80-IE : Special provisions in respect of certain undertakings in North-Eastern States
February 28, 2018

Section – 80-ID : 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 July, 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 July, 2010; or

(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 prescribed84, 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 prescribed85;

(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 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;

(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 (excluding areas falling within the Kolkata urban agglomeration on the basis of the 2001 census) West Bengal
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.

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