Transcript GST presentation

Tax Planning through Investments
SECTION 80-ID
DEDUCTION IN RESPECT OF
PROFITS AND GAINS FROM
BUSINESS OF HOTELS AND
CONVENTION CENTRES IN
NATIONAL CAPITAL REGION.
CA. Rajat Mohan
B.Com(H),ACA, ACS, DISA
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MOHAN AGGARWAL & ASSOCIATES
Chartered Accountants
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(A). TAXPAYER CATEGORY SECTION 80-ID
This deduction is available to all categories of taxpayers.
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Chartered Accountants
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(B). CONDITIONS SECTION 80-ID
(a)
Commencement of operations criteria —
Situation
Period in which hotel
starts functioning
Business of hotel located in the specified 1 April, 2007 and
area, if such hotel is constructed.
ending on 31 July,
2010.
Business of building, owning and operating a 1 April, 2007 and
convention centre, located in the specified ending on 31 July,
area, if such convention centre is constructed. 2010.
Business of hotel located in the specified 1 April, 2008 and
district having a World Heritage Site, if such ending on 31 March,
hotel is constructed.
2013.
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Chartered Accountants
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(B). CONDITIONS SECTION 80-ID
(b)
Computation of profits criteria — For the purposes of
computing deduction under this section profits and gains of an
eligible business shall be computed on stand alone basis. In other
words it should be assumed that eligible business was the only
source of income of the assessee during the previous year relevant
to the initial assessment year and to every subsequent assessment
year up to and including the assessment year for which the
determination is to be made.
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Chartered Accountants
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(B). CONDITIONS SECTION 80-ID
(c)
Inter-unit transaction at market value criteria — Where
any goods or services are transacted (purchase or sale) eligible
business or any other business carried on by the assessee shall be
at market value. However where the consideration for such transfer
as recorded in the accounts of the eligible business does not
correspond to the market value as on the date of the transfer, then,
for the purposes of the deduction under this section, the profits and
gains of such eligible business shall be computed as if the transfer
had been made at the market value of such goods or services.
Where, in the opinion of the Assessing Officer, the
computation of the profits and gains of the eligible business in the
manner hereinbefore specified presents exceptional difficulties, the
Assessing Officer may compute such profits and gains on such
reasonable basis as he may deem fit.
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Chartered Accountants
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(B). CONDITIONS SECTION 80-ID
(d)
Transaction between closely connected assessee
criteria — Where it appears to the assessing officer that, owing to
the close connection between the assessee carrying on the eligible
business and any other person, that the business transacted
between them produces more than the ordinary profits to such
eligible business, the Assessing Officer shall, in computing the
profits and gains of such eligible business for the purposes of the
deduction under this section, take the amount of profits as may be
reasonably deemed to have been derived there from.
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Chartered Accountants
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(B). CONDITIONS SECTION 80-ID
(e)
Dual benefit not allowed criteria — Where any amount of
profits and gains is claimed and allowed under this section, deduction
to the extent of such profits and gains shall not be allowed under any
other provisions of Chapter-VIA under the heading ‘C. Deductions in
respect of certain incomes’. Deduction under this section shall not
exceed the profits and gains of eligible business. No deduction shall
be allowed under any other section contained in Chapter VIA or
section 10AA, in relation to the profits and gains of the undertaking
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Chartered Accountants
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(B). CONDITIONS SECTION 80-ID
(f) Dual benefit to member AOP/BOI not allowed criteria —
Where, benefit of this deduction is given to an association of
persons or a body of individuals, no deduction under this section
shall again be allowed to member of the association of persons or
body of individuals in relation to the share of such member.
(g)
Powers of Central Government criteria — Central
Government may, after making inquiry, direct, by notification in the
Official Gazette that the exemption conferred by this section shall not
apply to any class of industrial undertaking or enterprise with effect
from such date as it may specify in the notification.
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Chartered Accountants
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(B). CONDITIONS SECTION 80-ID
(h)Compulsory filing Return of Income criteria — No deduction
shall be allowed to assessee under this section unless he furnishes
a return of his income for such assessment year on or before the
due date specified under section 139(1). In addition, the claim of
this deduction shall be compulsorily made in the return of income.
(i)
Audit of Accounts criteria — The deduction shall not be
admissible unless the accounts of the undertaking audited by an
accountant for the previous year for which the deduction is claimed.
Report of such audit is to be furnished in the Form no. 10CCBBA duly
signed and verified by such accountant. This report shall be
accompanied by the Profit and Loss Account and Balance Sheet of
the undertaking or enterprise as if the undertaking or the enterprise
were a distinct entity.
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Chartered Accountants
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(B). CONDITIONS SECTION 80-ID
(j)
New Business undertaking
criteria — Eligible
Undertaking shall not be formed by splitting up, or the reconstruction,
of a business already in existence. However, this condition shall not
apply in respect of an undertaking which is formed as a result of the
re-establishment, reconstruction or revival by the assessee of the
business of any such undertaking as is referred to in section 33B.
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Chartered Accountants
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(B). CONDITIONS SECTION 80-ID
k)New Plant and Machinery criteria — Eligible Undertaking shall
not be formed by the inward transfer to a new business of machinery
or plant previously used for any purpose.
This condition shall be deemed to be complied with if value
of used machinery or plant or any part thereof transferred to a new
business does not exceed 20% of the total value of the machinery or
plant used in the business.
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Chartered Accountants
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(B). CONDITIONS SECTION 80-ID
Any machinery or plant used outside India by any person other than
the assessee shall not be regarded as machinery or plant previously
used for any purpose, if the following conditions are fulfilled:
(i) Such machinery or plant was not, at any time previous to the
date of the installation by the assessee, used in India;
(ii) Such machinery or plant is imported into India from any
country outside India; and
(iii) No deduction on account of depreciation in respect of
such machinery or plant has been allowed or is allowable under the
provisions of this Act in computing the total income of any person for
any period prior to the date of the installation of machinery or plant by
the assessee.
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Chartered Accountants
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(C). AMOUNT OF DEDUCTION SECTION 80-ID
Deduction shall be 100% of the profits and gains derived from such
business for 5 consecutive assessment years beginning from the
initial assessment year.
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Chartered Accountants
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(D). MEANING SECTION 80-ID
i)‘Convention centre’ means a building of a prescribed area
comprising of convention halls to be used for the purpose of holding
conferences and seminars, being of such size and number and
having such other facilities and amenities, as may be prescribed(Rule
18DE)
ii).‘Hotel’ means a hotel of 2 star, 3 star or 4 star category as
classified by the Central Government.
iii).‘Initial assessment year’
(a)
In the case of a hotel, means the assessment year
relevant to the previous year in which the business of the hotel starts
functioning;
(b)
In the case of a convention centre, means the
assessment year relevant to the previous year in which the
convention centre starts operating on a commercial basis.
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Chartered Accountants
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THANK YOU
Your comments and suggestions are of utmost
importance and are always welcomed.
CA. Rajat Mohan
B.Com(H), ACA, ACS, DISA
MOHAN AGGARWAL & ASSOCIATES
Chartered Accountants
Head Office
F-31 D.B. Gupta Market, Karol Bagh, New Delhi-110005
Office Phone: 011-23672609 / 23535809
Branch Office
18A, IInd Floor, North Avenue Road, West Punjabi Bagh, New Delhi-110026
office Phone: 011-47322696/97
Website: www.delhicamohan.com
E-mail: [email protected]
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