Amendment of section 80LA.
27. In section 80LA of the Income-tax Act, with effect from the 1st day of April, 2022,––
(i) in sub-section (1A), for the words “any other relevant laws was obtained”, the words “permission or registration under the International Financial Services Centre Authority Act, 2019 (50 of 2019.) was obtained” shall be substituted;
(ii) in sub-section (2), after clause (c), the following clause shall be inserted, namely:––
“(d) arising from the transfer of an asset, being an aircraft or aircraft engine, which was leased by a unit referred to in clause (c) to a domestic company engaged in the business of operation of aircraft, before such transfer subject to condition that the unit has commenced operation on or before the 31st day of March, 2024.”;
(iii) in sub-section (3), for clause (ii), the following clause shall be substituted, namely:––
“(ii) a copy of the permission obtained under clause (a) of sub-section (1) of section 23 of the Banking Regulation Act, 1949 (10 of 1949) or copy of permission or registration obtained under the International Financial Services Centre Authority Act, 2019 (50 of 2019).”.
Notes on Clauses:
Clause 27 of the Bill seeks to amend section 80LA of the Income-tax Act relating to deduction in respect certain incomes of Offshore Banking Units and International Financial Services Centre.
The provisions of the said section, inter alia, provides that where the gross total income of an assessee, (i) being a scheduled bank, or, any bank incorporated by or under the laws of a country outside India; and having an Offshore Banking Unit in a Special Economic Zone; or (ii) being a Unit of an International Financial Services Centre, includes any income referred to in sub-section (2), there shall be allowed, in accordance with and subject to the provisions of this section, a deduction from such income, of an amount equal to (a) one hundred per cent. of such income for such assessment years mentioned in sub-section(1) and sub-section(1A) of that section respectively.
It is proposed to amend the provisions of said sub-section (1A) so as to provide that deduction can also be claimed if permission or registration under the International Financial Services Centre Authority Act, 2019 was obtained.
Further sub-section (2) of the said section provides for the incomes which are eligible for deduction under the said section.
It is proposed to amend the provisions of said sub-section (2) of the said section by inserting new clause (d) so as to provide that the income from transfer of an asset ,being an aircraft or aircraft engine which was leased by a unit referred to in clause (c) to a domestic company engaged in the business of operation aircraft before such transfer subject to the condition that the unit has commenced operation on or before the 31st day of 2024 shall also be eligible for deduction.
Further sub-section (3) of the said section provides that no deduction under that section shall be allowed unless the assessee furnishes the report by an accountant certifying correct claim of deduction and a copy of permission obtained under clause (a) of subsection (1) of section 23 of the Banking Regulation Act, 1949.
It is proposed to amend clause (ii) of sub-section (3) of the said section so as to provide that in case the unit is registered under the International Financial Services Centre Authority Act, 2019 then the copy of permission shall mean a copy of the permission or registration obtained under the International Financial Services Centre Authority Act, 2019.
This amendment will take effect from 1st April, 2022 and will, accordingly, apply in relation to the assessment year 2022-2023 and subsequent assessment year.
