Amendment of section 80LA.
23. In section 80LA of the Income-tax Act, in sub-section (2), in clause (d), with effect from the 1st day of April, 2023,––
(i) after the words “being an aircraft”, the words “or a ship” shall be inserted;
(ii) in the Explanation, for the words ‘this clause, “aircraft” shall’, the words ‘this clause, “aircraft” and “ship” shall’ shall be substituted.
Notes on Clauses:
Clause 23 seeks to amend section 80LA of the Income-tax Act relating to deductions in respect of certain incomes of Offshore Banking Units and International Financial Services Centre.
Sub-section (1A) of the said section, inter-alia, provides that where the gross total income of an assessee, being a Unit of an International Financial Services Centre, includes any income referred to in sub-section (2) of the said section, there shall be allowed, in accordance with and subject to the provisions of that section, a deduction from such income, of an amount equal to one hundred per cent. of such income for any ten consecutive assessment years, at the option of the assessee, out of fifteen years, beginning with the assessment year relevant to the previous year in which the permission, under clause (a) of sub-section (1) of section 23 of the Banking Regulation Act, 1949 or permission or registration under the Securities and Exchange Board of India Act, 1992 or any other relevant law was obtained.
Sub-section (2) of the said section specifies the incomes which are eligible for deduction, inter-alia, under the said sub-section (1A).
It is proposed to amend clause (d) of sub-section (2) of the said section to provide that the income arising from the transfer of an asset, being a ship which was leased by an unit of the International Financial Services Centre to a person, subject to the condition that the unit has commenced operation on or before the 31st day of March, 2024 shall also be eligible for deduction under the said sub-section (1A).
It is further proposed to amend the Explanation to the said clause (d) so as to provide that the term “ship” shall have the same meaning as provided in clause (4F) of section 10 of the Act.
These amendments will take effect from 1st April, 2023 and will, accordingly, apply in relation to the assessment year 2023-2024 and subsequent assessment years.
