Assessees who provide infrastructure growth services are eligible for a tax holiday under Section 80IA. Qualified assessees may receive a tax deduction on profits under the business head for a defined duration of time under such a section. Some specific undertakings are included. Under this section, various terms, eligibility, and amounts of deduction are provided for each eligible undertaking. Let us take a closer look at them.

There are a few specific undertakings under such a section, and a detailed list is provided below.

Provision of infrastructure facility.

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 year 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 – 

The First 5 years – dedication is 100% of profit 

Following 5 years – dedication is 30% of 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 year in a row.

Must ReadWhat 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 firm involved in the industry of laying and operating a cross-country natural gas distribution network, which includes pipelines and storage facilities.

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

Some criteria must be fulfilled for industrial undertakings to receive a tax deduction under Section 80IA. They are listed below.

  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.

Aside from these necessary parameters, there are extra requirements for particular infrastructure development such as telecommunications, power generation, and so on.

Maximum Deduction Amount Under Section 80IA

Gains and profits of up to 100% produced by such companies are tax-deductible under Section 80IA. However, only profits and earnings from the past ten years are qualified for this deduction.

Gains or dividends of 10 successive years from the previous 15 years are qualified for deductions u/s 80IA for airports, ports, inland ports, inland waterways, and navigational channels. It should be noted that there have been further exceptions for unique industries.