What Is Section 80IA?

A tax break is available to assessors who offer infrastructure growth services under Section 80IA. Under such a section, qualified assessees may, for a predetermined period of time, get a tax deduction on earnings reported under the business head. There are several particular projects included. Each qualifying undertaking is given different terms, eligibility requirements, and deduction amounts under this section. Let’s examine them more closely.

A thorough list of the specific tasks that fall under this section is given below.

Provision of infrastructure facility.

Section 80 IA

Eligibility – An Indian firm involved in an infrastructure facility.

Conditions – 

  • Inception between 1/4/1995, and 1/4/2017.
  • ITR must be filed without any delay and deductions must be claimed.
  • A CA will conduct the audit.

Deduction amount – 

100% of profit for 10 assessment years in a row.

Telecommunication services.

Eligibility – A company that offers telecommunications services.

Conditions – 

  • Inception between 1/4/1995, and 1/3/2005.
  • ITR must be submitted on time, and deductions must be claimed. 
  • An audit must be performed by a CA.
  • It must be a new venture.

Deduction amount – 

In the First 5 years – dedication is 100% of the profit 

Following 5 years – dedication is 30% of the profit

Industrial parks or special economic zone

Eligibility – A company that owns and runs an industrial park or special economic zone designated by the central government.

Conditions – 

  • Inception between 1/4/1997, and 31/3/2011.
  • ITR must be submitted on time, and deductions must be claimed. 
  • An audit must be performed by a CA.

Deduction amount – 

100% of profit for 10 assessment years in a row.

Must Read – What is section 80JJA?

Section 80IA

Power generation, transmission, and distribution

Eligibility – An venture established in any region of India for the generation or generation and distribution of power.

Conditions – 

  • Inception & Operation between 1/4/1993, and 31/3/2017, Transmission between 1/4/1999 to 31/3/2017, Restoration and Improvement between 1/04/2004 to 31/03/2011 
  • ITR must be submitted on time, and deductions must be claimed. 
  • An audit must be performed by a CA.
  • It must be a new venture.

Deduction amount – 

100% of profit for 10 assessment years.

Reconstruction of a power unit 

Eligibility – An Indian corporation that is involved in the renovation or restoration of a power-generating plant.

Conditions – 

  • Creation with majority equity involvement before 30/11/2005; operation starts before 31/03/2011.
  • ITR must be submitted on time, and deductions must be claimed. 
  • An audit must be performed by a CA.

Deduction amount – 

100% of profit for 10 assessment years.

Cross-country natural gas distribution network

Eligibility – an Indian company engaged in the construction and management of a national natural gas distribution system that comprises storage facilities and pipelines.

Conditions – 

  • Begin activities on or after April 1/4/2007.
  • ITR must be submitted on time, and deductions must be claimed. 
  • An audit must be performed by a CA.
  • It must be a new venture.

Deduction amount – 

100% of profit for 10 assessment years.

Claiming Deductions Under Section 80IA

Industrial undertakings must meet certain requirements in order to be eligible for a tax deduction under Section 80IA. Below is a list of them.

  1. The proprietor of the industrial enterprise must be.
  • A single Indian enterprise or a group of Indian firms.
  • A board, corporation, authority, or other body created by a State or Central Act.
  1. The construction of the new infrastructure facility must be approved by a statutory body, local authority, or the government.
  1. The upkeep or operation of such a facility must have begun after 1/4/1995.

In addition to these essential conditions, specific infrastructure development projects like telecommunications, power generation, and so forth have additional requirements.

Maximum Deduction Amount Under Section 80IA

Under Section 80IA, such enterprises are permitted to deduct up to 100% of their gains and profits from taxes. However, only profits and earnings from the previous ten years are eligible for this deduction.

For earnings or dividends of 10 consecutive years from the past 15 years, airports, ports, inland ports, inland waterways, and navigational channels are eligible for deductions under Section 80IA. It should be noted that there have been further exceptions for specific industries.