Amendment of section 80-IAC.
36. In section 80-IAC of the Income-tax Act, with effect from the 1st day of April, 2021,––
(i) in sub-section (2), for the word “seven”, the word “ten” shall be substituted;
(ii) in the Explanation, in clause (ii), in sub-clause (b), for the word “twenty-five”, the words “one hundred” shall be substituted.
Notes on Clauses:
Clause 36 of the Bill seeks to amend section 80-IAC of the Income-tax Act relating to special provision in respect of specified business.
The provisions of section 80-IAC, inter alia, provide for a deduction of an amount equal to hundred per cent. of the profits and gains derived from an eligible business by an eligible start-up for three consecutive assessment years out of seven years at the option of the assessee and the total turnover of its business does not exceed twenty-five crore rupees in the previous year relevant to the assessment year for which deduction under this section is claimed.
It is proposed to amend the said section so as to provide that the deduction under the said section shall be available to an eligible start-up for a period of three consecutive assessment years out of ten years beginning from the year in which the eligible start-up is incorporated and the total turnover of its business does not exceed one hundred crore rupees in the previous year relevant to the assessment year for which deduction under this section is claimed.
This amendment will take effect from 1st April, 2021 and will, accordingly, apply in relation to the assessment year 2021-2022 and subsequent assessment years.
