Period for claiming deduction by start-ups u/s 80IAC from AY 2018-19

By | February 23, 2018
(Last Updated On: February 23, 2018)

CBDT CIRCULAR NO.2/2018 [F.NO.370142/15/2017-TPL]DATED 15-2-2018

40. Extending the period for claiming deduction by start-ups.

40.1 Before amendment by the Act, the provisions of section 80-IAC of the Income-tax Act provided that an eligible start-up shall be allowed a deduction of an amount equal to 100% of the profits and gains derived from eligible business for three consecutive assessment years out of five years beginning from the year in which such eligible start-up is incorporated.

40.2 In view of the fact that start-ups may take time to derive profit out of their business, section 80-IAC of the Income-tax Act has been amended to provide that deduction under section 80-IAC can be claimed by an eligible start-up for any three consecutive assessment years out of seven years beginning from the year in which such eligible start-up is incorporated.

40.3 Applicability: These amendments take effect from 1st April, 2018 and will, accordingly, apply from assessment year 2018-19 and subsequent years.

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