THE THIRTEENTH SCHEDULE
[See sections 32(2) 44(8) and 318(o)(i), (q)(i), (r)(i)]
COMPUTATION OF PROFITS OF A SPECIFIED BUSINESS
1. The provisions of this Schedule shall apply to the following specified businesses which fulfill such conditions as may be prescribed by the Central Government:—
(a) business of generation, transmission or distribution of power;
(b) business of developing, or operating and maintaining, any infrastructure facility;
(c) business of operating and maintaining a hospital in any area, other than the excluded area;
(d) business of processing, preservation and packaging of fruits and vegetables;
(e) business of laying and operating a cross country natural gas or crude or petroleum oil pipeline network for distribution, including storage facilities being an integral part of the network;
(f) business of setting up and operating a cold chain facility;
(g) business of setting up and operating a warehousing facility for storage of agricultural produce;
(h) business of building and operating, anywhere in India, a new hotel of two-star or above category as classified by the Central Government and commences operation on or after the 1st day of April, 2010;
(i) business of building and operating, anywhere in India, a new hospital with at least one hundred beds for patients and commences operation on or after the 1st day of April, 2010;
(j) business of developing and building a housing project under a scheme for slum re-development or rehabilitation framed by the Central Government or a State Government, as the case may be, and notified by the Board in this behalf in accordance with the guidelines as may be prescribed and commences operation on or after the 1st day of April, 2010.
2. The profits of every specified business shall be computed separately under this Schedule.
3. The profits of any specified business shall be the gross income from the business carried on by the assessee at any time during the financial year as reduced by the amount of business expenditure incurred by the assessee, wholly and exclusively, for the purposes of the business during the year.
4. The gross income referred to in paragraph 1 shall be the aggregate of—
(a) the accruals or receipts derived by the assessee from the specified business;
(b) the accruals or receipts derived by the assessee from the transfer, discardment, destroyal or destruction of any business captial asset (other than land, goodwill or financial instrument) in respect of which deduction has been allowed, or allowable, under paragraph 5 in any financial year; and
(c) the amounts referred to in sub-section (2) of section 33.
5. The amount of business expenditure referred to in paragraph 1 shall be the aggregate of the amount of—
(a) operating expenditure referred to in section 35, incurred by the assessee;
(b) finance charges referred to in section 36, incurred by the assessee;
(c) expenditure on any licence charges, rental fees or other charges, if actually paid;
(d) capital expenditure incurred by the assessee;
(e) expenditure referred to in clauses (a) to (d) incurred before the commencement of the business.
6. The profits computed under paragraph 1 shall be presumed to have been computed—
(a) after giving full effect to every loss, allowance or deduction referred to in sections 35 to 40 (both inclusive);
(b) after giving full effect to any deduction allowable under Sub-Chapter-IV of Chapter III in relation to the profits of the specified business.
7. The written down value of any business asset used in the specified business shall be computed as if the assessee has claimed and has been actually allowed the deduction in respect of depreciation under section 38, initial depreciation under section 39 and terminal allowance under section 40.
8. The amount of common costs including depreciation attributable to the specified business and any other business shall be determined in such manner as may be prescribed.
9. The provisions of this Schedule shall apply to the business referred to in paragraph 1, which fulfils the following conditions, namely:—
(a) it is not set-up by splitting up, or the reconstruction, of a business already in existence;
(b) it is not set-up by the transfer to the specified business of machinery or plant previously used for any purpose; and
(c) in a case where the business is of the nature referred to in clause (e) of paragraph 1, the business—
(i) is owned by a company formed and registered in India under the Companies Act, 1956 or by a consortium of such companies or by an authority or a board or a corporation established or constituted under any Central or State Act;
(ii) has been approved by the Petroleum and Natural Gas Regulatory Board established under sub-section (1) of section 3 of the Petroleum and Natural Gas Regulatory Board Act, 2006 and notified by the Central Government in this behalf;
(iii) has made not less than such proportion of its total pipeline capacity as specified by the regulations made by the Petroleum and Natural Gas Regulatory Board established under sub-section (1) of section 3 of the Petroleum and Natural Gas Regulatory Board Act, 2006 available for use on common carrier basis by any person other than the assessee or an associated person; and
(iv) fulfils any other condition as may be prescribed.
10. In this Schedule, unless the context otherwise requires—
(a) an "associated person" in relation to the assessee, means a person—
(i) who participates, directly or indirectly, or through one or more intermediaries in the management or control or capital of the assessee;
(ii) who holds, directly or indirectly, shares carrying not less than twenty-six per cent. of the voting power in the capital of the assessee;
(iii) who appoints more than half of the Board of directors or members of the governing board, or one or more executive directors or executive members of the governing board of the assessee; or
(iv) who guarantees not less than ten per cent. of the total borrowings of the assessee;
(b) any machinery or plant which was used outside India by any person other than the assessee shall not be regarded as machinery or plant previously used for any purpose, if—
(i) the machinery or plant was not, at any time prior to the date of the installation by the assessee, used in India;
(ii) the machinery or plant is imported into India from any country outside India; and
(iii) no deduction on account of depreciation in respect of the machinery or plant has been allowed or is allowable under the provisions of this Code, or the Income-tax Act, 1961 as it stood before the commencement of this Code, in computing the total income of any person for any period prior to the date of the installation of the machinery or plant by the assessee;
(c) the condition specified in clause (b) of paragraph 9 shall be deemed to have been complied with if the total value of the machinery or plant or any part thereof, previously used for any purpose and transferred to the specified business, does not exceed twenty per cent. of the total value of the machinery or plant used in the business;
(d) the capital expenditure referred to in clause (d) of paragraph 5 shall not include any expenditure incurred on the acquisition of any land including long term lease, goodwill or financial instrument.
(e) 'excluded area' means the areas of—
(i) Greater Mumbai urban agglomeration;
(ii) Delhi urban agglomeration;
(iii) Kolkata urban agglomeration;
(iv) Chennai urban agglomeration;
(v) Hyderabad urban agglomeration;
(vi) Bangalore urban agglomeration;
(vii) Ahmedabad urban agglomeration;
(viii) the District of Faridabad;
(ix) the District of Gurgaon;
(x) the District of Gautam Budh Nagar;
(xi) the District of Ghaziabad;
(xii) the District of Gandhinagar; and (xiii) the City of Secunderabad;
(f) "urban agglomeration" means the area included in the relevant urban agglomeration on the basis of the 2001 census.
