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15. Amendment of section 80-IB. |
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—In section 80-IB of the Income-tax Act,—
(a) in sub-section (9), after the second proviso, the following proviso shall be inserted, namely:—
"Provided also that no deduction under this sub-section shall be allowed to an undertaking engaged in refining of mineral oil, if it begins refining on or after the 1st day of April, 2009.";
(b) after sub-section (11B), the following sub-section shall be inserted with effect from the 1st day of April, 2009, namely:—
‘(11C) The amount of deduction in the case of an undertaking deriving profits from the business of operating and maintaining a hospital located anywhere in India, other than the excluded area, shall be hundred per cent. of the profits and gains derived from such business for a period of five consecutive assessment years, beginning with the initial assessment year, if—
(i) the hospital is constructed and has started or starts functioning at any time during the period beginning on the 1st day of April, 2008 and ending on the 31st day of March, 2013;
(ii) the hospital has at least one hundred beds for patients;
(iii) the construction of the hospital is in accordance with the regulations or bye-laws of the local authority; and
(iv) the assessee furnishes along with the return of income, a report of audit in such form and containing such particulars, as may be prescribed, and duly signed and verified by an accountant, as defined in the Explanation to sub-section (2) of section 288, certifying that the deduction has been correctly claimed.
Explanation.—For the purposes of this sub-section,—
(a) a hospital shall be deemed to have been constructed on the date on which a completion certificate in respect of such construction is issued by the local authority concerned;
(b) "initial assessment year" means the assessment year relevant to the previous year in which the business of the hospital starts functioning;
(c) "excluded area" shall mean an area comprising—
(i) Greater Mumbai urban agglomeration;
(ii) Delhi urban agglomeration;
(iii) Kolkata urban agglomeration;
(iv) Chennai urban agglomeration;
(v) Hyderabad urban agglomeration;
(vi) Bangalore urban agglomeration;
(vii) Ahmedabad urban agglomeration;
(viii) District of Faridabad;
(ix) District of Gurgaon;
(x) District of Gautam Budh Nagar;
(xi) District of Ghaziabad;
(xii) District of Gandhinagar; and
(xiii) City of Secunderabad;
(d) the area comprising an urban agglomeration shall be the area included in such urban agglomeration on the basis of the 2001 census.’.
Clause 15 seeks to amend section 80-IB of the Income-tax Act, which relates to deduction in respect of profits and gains from certain industrial undertakings other than infrastructure development undertakings.
Sub-section (9) of the said section provides for deduction in respect of profits and gains derived from commercial production or refining of mineral oil. The term "mineral oil" does not include petroleum and natural gas, unlike other sections of the Act.
The deduction under this sub-section is available to an undertaking for a period of seven consecutive assessment years including the initial assessment year—
(i) in which the commercial production under a production sharing contract has first started ; or
(ii) in which the refining of mineral oil has begun.
It is proposed to insert a new proviso in sub-section (9) of section 80-IB so as to provide that no deduction under this sub-section shall be allowed to an undertaking engaged in refining of mineral oil, if it begins refining on or after 1st April, 2009.
This amendment will take effect from 1st April, 2008.
Further, a new sub-section (11C) is proposed to be inserted in the said section so as to extend a five year tax holiday to hospitals located anywhere in India, except seven urban agglomerations of Greater Mumbai, Delhi, Kolkata, Chennai, Hyderabad, Bangalore and Ahmedabad and the districts of Faridabad, Gurgaon, Ghaziabad, Gautam Budh Nagar and Gandhinagar and the city of Secunderabad. The area comprising an urban agglomeration shall be the area included in such urban agglomeration on the basis of the 2001 census. The said tax benefit will be available to a hospital which is constructed and has started or starts functioning at any time during the period beginning on 1st April, 2008 and ending on 31st March, 2013. Initial assessment is defined as the assessment year relevant to the previous year in which the business of the hospital starts functioning.
This amendment will take effect from 1st April, 2009 and will accordingly apply in relation to the assessment year 2009-10 and subsequent assessment years.
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