Section 10B of ITA, 1961 : Section 10B: Special Provisions In Respect Of Newly Established Hundred Per Cent Export-Oriented Undertakings

Explanation using Example

Imagine a company named 'TechExports Pvt. Ltd.' that has been established in India to develop and export computer software. The company started its operations in the financial year 2002-03. Here's how Section 10B of the Income-tax Act, 1961 applies to this company:

• TechExports Pvt. Ltd. is considered a 100% export-oriented undertaking as it exports software developed in India to clients overseas.
• For the assessment year 2003-04, the company will be entitled to claim a deduction of 90% of its profits and gains derived from the export of its software as per the provisions of Section 10B(1).
• The company must ensure that the export turnover from selling its software is received in convertible foreign exchange and brought into India within the specified time frame to be eligible for the deduction.
• Since the company started in 2002-03, it can claim the deduction for ten consecutive assessment years. However, no deduction under this section would be allowed for the assessment year beginning on April 1, 2012, and subsequent years.
• TechExports Pvt. Ltd. must also furnish a return of its income on or before the due date specified under Section 139(1) to claim the deduction.
• Additionally, the company must submit a report from an accountant certifying that the deduction has been correctly claimed as per the provisions of this section.

This example demonstrates how TechExports Pvt. Ltd. can benefit from the tax incentives provided under Section 10B for its export business, thereby encouraging the export of computer software and contributing to the growth of the Indian economy.