Scope of section 35AD expanded to include the business of developing, maintaining and operating a new infrastructure facility

Related amendment in section: 80-IA

Effective from: A.Y.2018-19

(i) The Finance Minister in his Budget Speech, 2015 has indicated that the rate of corporate tax will be reduced from 30% to 25% over the next four years along with corresponding phasing out of exemptions and deductions. The Government proposed to implement this decision in a phased manner.

(ii) The profit-linked deduction under section 80-IA(4)(i) available to any enterprise which develops or operates and maintains a new infrastructure facility is also being phased out. Accordingly, this deduction would not be available in respect of any enterprise which starts the development or operation and maintenance of the infrastructure facility on or after 1st April, 2017.

(iii) However, such enterprise would be eligible for investment-linked tax deduction under section 35AD –

	Section	Particulars	Provision
(i)	35AD(8)(c)	Definition of “Specified business”	The business of developing or maintaining and operating or developing, maintaining and operating a new infrastructure facility has been included in the definition of  specified business”.
(ii)	35AD(8)(ba)	Definition of “infrastructure facility”	(i)		A road including toll road, a bridge or a rail system.
			(ii)		A highway project including housing or other activities being an integral part of the highway project.
			(iii)		A water supply project, water treatment system, irrigation project, sanitation and sewerage system or solid waste management system.
			(iv)		A port, airport, inland waterway, inland port or navigational channel in the sea.
(iii)	35AD(5)	Date of commencement of such specified business	On or after 1.4.2017, where the specified business is in the nature of developing or operating and maintaining or developing, operating and maintaining, any infrastructure facility.
(iv)	35AD(2)	Conditions to be satisfied by such specified business	(i)	The business should be owned by a company registered in India or by a consortium of such companies or by an authority or a board or corporation or any other body established or constituted under any Central or State Act.
			(ii)	The entity should have entered into an agreement with the Central Government or a State Government or a local authority or any other statutory body for developing or operating and maintaining or developing, operating and maintaining, a new infrastructure facility.