28. Insertion of new section 80PA.
After section 80P of the Income-tax Act, the following section shall be inserted with effect from the 1st day of April, 2019, namely:-
Deduction in respect of certain income of Producer Companies.
‘80PA. (1) Where the gross total income of an assessee, being a Producer Company having a total turnover of less than one hundred crore rupees in any previous year, 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 attributable to such business for the previous year relevant to an assessment year commencing on or after the 1st day of April, 2019, but before the 1st day of April, 2025.
(2) In a case where the assessee is entitled also to deduction under any other provision of this Chapter, the deduction under this section shall be allowed with reference to the income, if any, as referred to in this section included in the gross total income as reduced by the deductions under such other provision of this Chapter.
Explanation.-For the purposes of this section,-
(i) “eligible business” means-
(a) the marketing of agricultural produce grown by the members; or
(b) the purchase of agricultural implements, seeds, livestock or other articles intended for agriculture for the purpose of supplying them to the members; or
(c) the processing of the agricultural produce of the members;
(ii) “member” shall have the meaning assigned to it in clause (d) of section 581A of the Companies Act, 1956 (1 of 1956);
(iii) “Producer Company” shall have the meaning assigned to it in clause (l) of section 581A of the Companies Act, 1956 (1 of 1956).
Notes on Clauses:
Clause 28 of the Bill seeks to insert a new section 80PA of the Income-tax Act relating to deduction in respect of certain income of Producer Companies.
It is proposed to insert the said new section so as to provide that in case of an assessee, being a Producer Company, having a total turnover of one hundred crore rupees or less in any previous year, the gross total income includes any income from the marketing of agricultural produce grown by its members, or the purchase of agricultural implements, seeds, livestock or other articles intended for agriculture for the purpose of supplying them to its members, or the processing of the agricultural produce of its members, the whole of the amount of income or profits and gains and business attributable to any one or more of such activities shall be deducted in computing the total income of the assessee for the previous year relevant to any assessment year commencing on or after the 1st day of April, 2019, but before the 1st day of April, 2025.
It is further proposed to provide that where the assessee is entitled also to deduction under any other provision or provisions of Chapter VIA, the deduction under this section shall be allowed from the gross total income as reduced by the deductions under such other provision or provisions of the said Chapter.
It is also proposed to define the expressions "eligible business", "member" and "Producer Company" for the purposes of the said new section.
These amendments will take effect from 1st April, 2019 and will, accordingly, apply in relation to the assessment year 2019- 2020 and subsequent years.
