Applicable to: Enterprises engaged in infrastructure, power, telecom, SEZs, etc.
This section provides 100% tax exemption on profits from eligible businesses for a fixed period (5-10 years), boosting private investment in critical sectors.
Key Features (AY 2025-26)
1. Eligible Businesses
| CATEGORY | INITIAL YEARS | DEDUCTION PERIOD |
| Infrastructure (Roads, Ports, Airports) | 2005-2020 | 10 consecutive years |
| Power Generation/Distribution | 1993-2021 | 10 years |
| Telecom Services | 2005-2021 | 10 years |
| SEZ Units | 2006-2020 | 15 years (phased) |
| Industrial Parks | 2008-2017 | 10 years |
2. Deduction Amount
- 100% of profitsfor the specified period
- Additional deductionsfor:
- In-house R&D(weighted 200% deduction)
- Himalayan states/Northeast projects(extra 10% for 5 years)
3. Claim Period
- Starts from the year of commencement of operations
- Must be claimed consecutively(cannot skip years)
4. Conditions
✅ Approval required from regulatory bodies (e.g., SEZ authority)
✅ Books must be audited if turnover > ₹1 crore
✅ MAT applies (Minimum Alternate Tax @15% + surcharge)
Illustrative Example
Case: A solar power plant operational from April 2018
- Eligible Period:FY 2018-19 to 2027-28
- Annual Profit:₹2 crore
- Tax Saved (30% rate):₹6 crore (₹60L/year × 10)
Comparison with Similar Sections
| SECTION | FOCUS | DEDUCTION |
| 80-IA | Infrastructure/Industrial | 100% for 5-15Y |
| 80-IB | SMEs/Rural projects | 25-100% for 5-10Y |
| 80-IC | Himalayan States | 100% for 10Y |
Pro Tips
- Pre-approval matters:Ensure projects meet CBDT notification timelines
- Track MAT liability:Even with 80-IA, 15% MAT may apply
- Combine with 80-IAC(for startups) for extended benefits
FAQs
Q: Can a company claim both 80-IA and 80-IB?
A: No, only one per unit (but different units may use different sections).
Q: Is GST turnover included in the ₹1 crore audit limit?
A: Yes, all revenue counts for audit eligibility.
Q: Can losses be carried forward after 80-IA?
A: Yes, but post-deduction profits can’t offset pre-deduction losses.
Section 80-IA is a powerful incentive for infrastructure/industrial projects, offering tax holidays of 5-15 years. While new projects post-2021 are largely excluded, existing units can continue claims till their period ends.
