Deduction in respect of certain incomes of Offshore Banking Unit and IFSC - Section 80LA - Income Tax - Ready Reckoner - Income Tax

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: ( a ) from an Offshore Banking Unit in a Special Economic Zone (b) from the Banking business with an undertaking located in a Special Economic Zone or any other undertaking which develops, develops and operates or develops, operates and maintains a Special Economic Zone; or ( c ) from any Unit of the International Financial Services Centre from its business for which it has been approved for setting up in such a Centre in a Special Economic Zone. (d) arising from the transfer of an asset, being an aircraft or a ship, which was leased by a unit referred to in clause (c) to a person, subject to the condition that the unit has commenced operation on or before the 31st day of March, [ 2030 (Amended by Finance Act, 2025 ) ] . C. Quantum of deduction: Part A For Scheduled Bank or Foreign Bank having OBU in SEZ 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 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: - Certificate of Chartered Accountant in Form 10CCF shall be file with return of income with in due date. 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 along with return of income with in due date. 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.