Deduction under section 80HHC of the Income-tax Act, 1961, in the case of taxpayers engaged in the business of growing and manufacturing tea

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..... rd has received representations regarding problems faced by tea exporters in calculating the claim of deduction under section 80HHC of the Income-tax Act. 2. In the case of taxpayers engaged in the business of growing and manufacturing tea, the income chargeable to tax from the sale of tea grown and manufactured in India, is computed under rule 8 of the Income-tax Rules. Under this rule, the com .....

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..... been considered. The Board is of the opinion that deduction under section 80HHC is to be allowed after the income chargeable to tax under the head "Profits and gains of business and profession" has been computed under rule 8. This is illustrated by the following two examples:-- EXAMPLE I Abbreviated Profit Loss A/c Rs. Rs. E .....

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..... (FOB) 1,500 1,500 Profits from the business Rs. 300 Allocation under rule 8 : Income chargeable under I.T. Act 40 per cent Rs. 120 Agricultural income Rs. 180 Income chargeable to income-tax Rs. 120 Less : Deducti .....

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