Special provisions in respect of certain undertakings in certain special category states - Section 80-IC - Income Tax - Ready Reckoner - Income Tax

Special provisions in respect of certain undertakings in certain special category states - Section 80-IC 1. The deduction is available to an assessee whose gross total income includes any profit and gains derived from: any undertaking which manufactures or produces any article or thing, and undertakes substantial expansion in the state of Sikkim or Himachal Pradesh or Uttaranchal or any of the North Eastern states like Assam, Tripura, Mizoram, Meghalaya, Arunachal Pradesh, Nagaland and Manipur on or before 31.3.2012. any undertaking which has begun or begins to manufacture or produce any article or thing in Himachal Pradesh or Uttaranchal on or before 31.3.2012. Note: Substantial expansion means increase in the investment in the plant and machinery by at least 50% of the book value of plant and machinery (before taking depreciation in any year), as on the first day of the previous year in which the substantial expansion is undertaken. The deduction shall be 100% of profits and gains of the Industrial undertaking for the first 5 years commencing from the initial assessment year and 25% (30% in the case of a company) for the next 5 years. Note: Initial assessment year means the assessment year relevant to the previous year in which the undertaking begins to manufacture or produces articles or things, or completes substantial expansion. This section shall not apply to an undertaking or enterprise which is formed by splitting up, or the reconstruction of a business already in existence but shall apply if it is formed transfer to a new business of machinery or plant previously used for any purpose. Note:- It is mandatory to get books of accounts audited by a Chartered Accountant, in order to avail deduction. As per Section 80A(5) , if the deduction Is not claimed in the Return of Income then, no deduction shall be allowed.