New IT Act 2025 — Knowledge Bank

Deduction in respect of profits and gains from industrial undertakings or enterprises engaged in infrastructure development, etc.

Section 138 — Deduction in respect of profits and gains from industrial undertakings or enterprises engaged in infrastructure development, etc.

Old Act equivalent: Section 80-IA of IT Act 1961 Sub-part: Deductions from total income

Statutory Text

  1. In respect of any tax year, where—

(a) the gross total income of an assessee includes any profits and gains derived by an undertaking or an enterprise from any business referred to in section 80-IA of the Income-tax Act, 1961 (43 of 1961); and

(b) such assessee is eligible to claim a deduction from the profits and gains derived from such business for such tax year under the provisions of the said section, as if the said Act had not been repealed, there shall be allowed, in computing the total income of the assessee, a deduction from the profits and gains derived from such business, subject to the conditions that—

(i) the amount of deduction is calculated as per the provisions of section 80-IA of the Income-tax Act, 1961 (43 of 1961); and

(ii) the deduction under this Act shall be allowed only for such tax years, as would have been allowed under section 80-IA of the Income-tax Act, 1961 (43 of 1961), as if the said Act had not been repealed. Deductions in respect of profits and gains by an undertaking or enterprise engaged in development of Special Economic Zone.

Provisos

None.

Explanations

None.

Tables

Present in statutory text above — see formatted section.

Key Structure

  • Applies to: All assessees operating eligible infrastructure undertakings
  • Conditions: Undertaking engaged in developing/operating/maintaining infrastructure facility (road/highway, water supply, port, airport, etc.); or power generation/transmission/distribution; or telecom services; or industrial park/SEZ
  • Time limits: 100% profits deduction for 10 consecutive years out of first 15 years from commencement; must begin before specified dates
  • Monetary limits: Deduction limited to profits of the undertaking
  • Exceptions: Not available for business formed by splitting or reconstruction; not for transfer of used plant/machinery exceeding 20% of total value; audit report required

Cross-References

  • Section 80

Amendment Notes

None noted from the extracted pages.

Practical Notes

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