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| Business & Infrastructure Deductions — Sections 80IA to 80LA |
📌 Introduction
Are you a startup founder, infrastructure developer, or financial institution? The Income Tax Act rewards development and innovation through Sections 80IA to 80LA — powerful deductions to lower your tax outgo while building the economy. In this guide, we cover:
- Section 80-IA: Infrastructure development undertakings
- Section 80-IAB: SEZ developers
- Section 80-IB: Industrial undertakings, housing projects
- Section 80-IC/IE: Units in hilly or backward states
- Section 80-ID: Hotels and convention centers
- Section 80JJAA: New employment
- Section 80LA: International financial institutions (IFSCs)
🏗️ 1. Section 80-IA: Infrastructure Development
✅ Eligible Projects:
- Roads, highways, bridges, water treatment, power generation/distribution
- Must be approved by central government or statutory authority
💰 Deduction:
- 100% of profits for 10 consecutive years out of first 15 years of operation
Note: Deduction begins from the year chosen by the taxpayer, not necessarily the first year of operation.
🌐 2. Section 80-IAB: SEZ Developers
✅ Eligibility:
- Developer of Special Economic Zone (SEZ) notified on or after April 1, 2005
💰 Deduction:
- 100% of profits for 10 consecutive assessment years out of 15 years
🏭 3. Section 80-IB: Industrial & Housing Sector
✅ Coverage:
- Small-scale industrial units, cold storage, mineral oil refineries, hospitals, housing projects (approved before March 31, 2008)
💰 Deduction:
- Ranges from 25% to 100% depending on industry type & location
Note: Housing projects must meet size & approval conditions.
⛰️ 4. Sections 80-IC & 80-IE: Hilly State Units
✅ Location:
- Units in Sikkim, Himachal Pradesh, Uttarakhand, North Eastern states
💰 Deduction:
- 100% of profits for first 5 years, then 25% for next 5 years (or 30% for companies)
🏨 5. Section 80-ID: Hotels & Convention Centres
✅ Criteria:
- New 2-star+ hotels and convention centres in NCR or Tier-2 cities
- Must begin operation between April 1, 2007 and July 31, 2010
💰 Deduction:
- 100% of profits for 5 years
👨💼 6. Section 80JJAA: Deduction for New Employment
✅ Who can claim:
- Companies, LLPs, individuals with business income
🧾 Conditions:
- Employee with salary < ₹25,000/month
- Employed for ≥ 240 days in the year (150 days for manufacturing/apparel/footwear)
- Must be on payroll with EPFO contribution
💰 Deduction:
- 30% of additional employee cost for 3 years
💳 7. Section 80LA: IFSC & Foreign Banks
✅ Eligible Institutions:
- Scheduled banks with offshore units in IFSCs (e.g. GIFT City)
- Units providing services to non-residents
💰 Deduction:
- 100% of profits for 5 years, followed by 50% for next 5 years
📋 Pro Tips & Checklist
- Always maintain audit reports & certificates (Form 10CCB or relevant)
- File return before due date (Section 139(1)) to avail these deductions
- Select initial year of deduction wisely to maximize tax benefit
✅ Conclusion
Sections 80IA to 80LA offer huge tax relief for businesses engaged in infrastructure, SEZ, hospitality, and employment generation. If you’re planning to expand operations or are a startup in an eligible sector, these incentives can significantly reduce your tax liability.
➡️ Up Next:
Article 7: Education, Pension & Disability Deductions (80E, 80CCD, 80DD, 80DDB) — Learn how to claim tax benefits on education loans, NPS contributions, and medical treatments.
📥 Call to Action:
- Download our “Business & Infrastructure Deduction Checklist (PDF)” to stay compliant and organized.
- Comment below: Are you claiming any of these deductions in AY 2025–26?