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Deduction in respect of certain incomes of Offshore Banking Unit and IFSC - Section 80LA - Income Tax - Ready Reckoner - Income TaxExtract Deduction in respect of certain incomes of Offshore Banking Unit and IFSC - Section 80LA A. Eligible Assesse: i. Scheduled bank, or, any Foreign Bank having an Offshore Banking Unit in a SEZ, ii. Unit of an International Financial Services Centre (IFSC). Offshore Banking Unit (OBU) means a branch of bank located in SEZ and which has obtained required permission under the Banking Regulation Act. B. Eligible Income: Any income: i. From any OBU in a SEZ, ii. From Banking business with a. Undertaking located in a SEZ or b. Any undertaking which develops, develops and operates or operates and maintains a SEZ; iii. From any unit of IFSC iv. From the transfer of an aircraft, or ship which was leased by a unit of IFSC such unit has commenced operation upto 31.03.2024. C. Quantum of deduction: Part A For Scheduled Bank or Foreign Bank having OBU in SEZ i. 100% of such income for first 5 AY (beginning with year when permission under SEBI Act/Banking Regulation Act. 50% of such income for the next 5 AY. Provided that for the assessment year commencing on or after the 1st day of April, 2023, the deduction under this clause shall be 100% of such income. [Proviso added by FA, 2023 ] Part B For unit of IFSC i. 100% of such income for any 10 consecutive AY s at the option of the assessee, out of 15 years, beginning with the year in which the permission under SEBI Act/Banking Regulation Act/IFSC Authority Act, 2019. D. Additional Conditions: - i. Certificate of Chartered Accountant in Form 10CCF shall be file with return of income. ii. Copy of the permission u/s 23(1) of the Banking Regulation Act or IFSC Authority Act, 2019 in case of OBU shall be filed with return of income. iii Furnishing of information for payment to a non-resident, not being a company, or to a foreign company [ w.e.f 01.01.2024 ] As per rule 37BB(7) of Income Tax Rules a quarterly statement, for each quarter of the financial year shall be furnished in respect of all remittances referred to in sub-rules (1), (2) and sub-rule (3) by, (i) the authorised dealer in Form No. 15CC ; (ii) a Unit of an International Financial Services Centre referred to in section 80LA(1A), responsible for paying to a non-resident, not being a company, or to a foreign company, in Form No. 15CD , to the Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems) or the person authorised by the Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems) electronically under digital signature within 15 days from the end of the quarter of the financial year to which such statement relates in accordance with the procedures, formats and standards specified by the Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems) under rule 37BB(8) of Income Tax rules.
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