Deductions In Respect of Certain Income

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Deductions In Respect of Certain Income 

The Deductions in respect of section 80IA to 80 IE is quite confusing. Deduction from sec 80IA to 80IE is allowed to the assessee only if the assessee furnishes a return of income on or before the due date specified in section 139(1).

Deduction in respect of profits and gains from undertakings or Enterprise engaged in Infrastructure Development (Sec 80-IA).
Developing or operating or maintaining Infrastructure facility No Deduction is allowed to the enterprise which starts those operations mentioned in (A) after 01/4/2017.
Generation and distribution of power
i. Generation and distribution of power begins after 31/3/1993 but before 1/4/2017
ii. Starts transmission or distribution by laying a network of new transmission or distribution lines after 31/3/1999 but before 1/4/2017
iii. Undertakes substantial renovation and modernization of the existing network of transmission or distribution lines after 31/3/2004 but before 1/4/2017.
General Conditions
i. The undertaking is not formed by a splitting up or reconstruction of existing unit
ii. The undertaking is not formed by transfer of machinery or plant previously used for any purpose (usage of up to 20% of Previously used plant and machinery is allowed).
Computation of income for deduction
Computation of income for distribution can be done as follows-Other provisions related to this section are the following:-

Previous year                            Business k(80-IA Unit)                       Business L
             2015-2016                                              (50,000)                                                1,40,000
               2016-2017                                               30,000                                                  180,000
                2017-2018                                              70,000                                                   120,000

Audit of Accounts
Audit by CA is necessary and the assessee is to send the audit report along with the return of Income

Withdrawal of deduction:
The government may withdraw the deduction in respect of certain undertakings after making the enquiry.

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