6. In section 35AD of the Income-tax Act,—
(a) in sub-section (5), with effect from the 1st day of April, 2012,—
(i) in clause (ac), the word "and" occurring at the end shall be omitted;
(ii) after clause (ac), the following clauses shall be inserted, namely:—
"(ad) on or after the 1st day of April, 2011, where the specified business is in the nature of developing and building a housing project under a scheme for affordable housing 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;
(ae) on or after the 1st day of April, 2011, in a new plant or in a newly installed capacity in an existing plant for production of fertilizer; and";
(iii) in clause (b), for the words, brackets and letters "and clause (ac)", the words, brackets and letters "clause (ac), clause (ad) and clause (ae)" shall be substituted;
(b) in sub-section (8), in clause (c),—
(i) in sub-clause (iv), for the words "new hotel", the word "hotel" shall be substituted;
(ii) in sub-clause (v), for the words "new hospital", the word "hospital" shall be substituted;
(iii) after sub-clause (vi), the following sub-clauses shall be inserted with effect from the 1st day of April, 2012, namely:—
"(vii) developing and building a housing project under a scheme for affordable housing 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;
(viii) production of fertilizer in India;".
Notes on Clauses:
Clause 6 of the Bill seeks to amend section 35AD of the Income-tax Act relating to deduction in respect of expenditure on specified business.
The existing provisions contained in sub-section (5) of the aforesaid section provide for the date of commencement of operations of the specified businesses referred to in sub-section
(2) of the said section for the purposes of availing the deduction. Further, the existing provisions of clause (c) of sub-section (8) of the aforesaid section define the expression “specified business”.
The amendments proposed to the aforesaid section seek to include two new businesses as “specified business” along with their dates of commencement and also to omit the word “new” from the existing definition of ‘‘specified business” in respect of new hotel and new hospital.
Sub-clause (a) of this clause seeks to insert a new clause (ad) in the said sub-section (5) so as to provide that the date of commencement of operations shall be on or after the 1st day of April, 2011 where a business is in the nature of developing and building a housing project under a scheme for affordable housing 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.
It further seeks to insert a new clause (ae) in the said sub-section (5) to specify that the date of commencement of operations shall be on or after the 1st day of April, 2011 in a new plant or in a newly installed capacity in an existing plant for production of fertiliser.
These amendments will take effect from 1st April, 2012 and will, accordingly, apply in relation to the assessment year 2012-2013 and subsequent years.
Sub-clause (b) of this clause seeks to omit the word “new” from the expressions “new hotel” and “new hospital” in sub-clauses (iv) and (v) of clause (c) of sub-section (8) from the definition of “specified business”.
These amendments will take effect retrospectively from 1st April, 2011 and will, accordingly, apply in relation to the assessment year 2011-2012 and subsequent years.
Sub-clause (b) further seeks to insert a new sub-clause (vii) in clause (c) of the aforesaid sub-section (8) so as to include within the scope of “specified business”, the business of developing and building a housing project under a scheme for affordable housing 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.
It also seeks to insert a new sub-clause (viii) in the said clause
(c) of the aforesaid sub-section (8) so as to include production of fertilizer in India as a “specified business”.
These amendments will take effect from 1st April, 2012 and will, accordingly, apply in relation to the assessment year 2012-2013 and subsequent years.
