Section 80-IE of ITA, 1961 : Section 80-Ie: Special Provisions In Respect Of Certain Undertakings In North-Eastern States

Explanation using Example

Let's consider a hypothetical scenario where a company named 'GreenTech Innovations' is set up in the state of Meghalaya on 1st April 2010. GreenTech Innovations is engaged in the manufacturing of solar-powered irrigation systems, which is an eligible article under the Income-tax Act, 1961.

Since GreenTech Innovations started its operations in one of the North-Eastern States within the specified period (between 1st April 2007 and 31st March 2017), it may qualify for tax benefits under Section 80-IE of the Income-tax Act, 1961.

To avail the benefits, GreenTech Innovations must meet certain conditions, such as not being formed by splitting up or reconstruction of an existing business, and not using machinery or plant previously used for any other purpose.

If GreenTech Innovations fulfills all the conditions, it can claim a deduction of 100% of the profits and gains derived from the manufacturing of solar-powered irrigation systems for ten consecutive assessment years starting from the initial assessment year, which is the year they began manufacturing.

However, GreenTech Innovations cannot claim this deduction in addition to other deductions under sections like 80-IA, 80-IC, 10A, 10AA, 10B, 10BA, or 10C for the same profits. The total period of deduction cannot exceed ten assessment years.