Amendment of section 80-IAC.
36. In section 80-IAC of the Income-tax Act [as inserted by section 42 of the Finance Act, 2016 (28 of 2016)], in sub-section (2), for the words “five years”, the words “seven years” shall be substituted with effect from the 1st day of April, 2018.
Notes on Clauses:
Clause 36 of the Bill seeks to amend section 80-IAC of the Income-tax Act relating to special provision in respect of specified business.
The existing provisions of said section, inter alia, provide that where the gross total income of an assessee, being an eligible start-up, includes any profits and gains derived from eligible business, there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction of an amount equal to one hundred per cent. of the profits and gains derived from such business for three consecutive assessment years and at the option of the assessee the said deduction may be claimed for any three consecutive assessment years out of five years beginning from the year in which the eligible startup is incorporated subject to the condition that it is incorporated.
It is proposed to amend the said sub-section so as to provide that the deduction shall be allowed for any three consecutive assessment years out of seven years instead of five years, beginning from the year in which such eligible start-up is incorporated.
This amendment will take effect from 1st April, 2018 and will, accordingly, apply in relation to the assessment year 2018-2019 and subsequent years.
