Section 80JJA: Deduction for Profits from Bio-Degradable Waste Business

Applicable to: Businesses engaged in collecting/processing biodegradable waste

This section provides a 100% tax deduction on profits from recycling agricultural/animal waste, promoting sustainable waste management.

Key Features (AY 2025-26)

1.  Eligible Activities

✅ Agricultural Waste:

• Processing sugarcane trash, paddy straw, coconut husks
• Converting crop residue into biofuel/manure

✅ Animal Waste:

• Processing slaughterhouse waste
• Converting livestock dung into biogas

✅ Municipal Waste:

• Segregating and composting organic waste

2.  Deduction Details

• 100% of profitsfrom waste processing business
• No upper limiton deduction amount
• No minimum turnoverrequirement

3.  Compliance Requirements

• Proof of waste sourcing(contracts with farmers/municipalities)
• Waste processing licensefrom pollution control board
• Separate books of accountsfor waste business

Illustrative Example

Case: Bio-CNG plant processing 10 tons/day cattle dung

• Annual Revenue:₹1.2 crore
• Profit:₹30 lakh
• Tax Saved (@30%):₹9 lakh

Comparison with Similar Green Incentives

Pro Tips for Claiming

1. Obtain Necessary Certifications:
   • Pollution Control Board approval
   • FSSAI license (for organic manure)
2. Maintain Detailed Records:
   • Waste collection receipts
   • Processing logs
3. Combine with Other Schemes:
   • Subsidies under National Biofuel Policy
   • GST benefits@5% for organic manure

FAQs

Q: Does municipal waste collection qualify?
A: Yes, if processing results in saleable products (compost/RDF).

Q: Is there a minimum investment requirement?
A: No, but substantial infrastructure improves claim credibility.

Q: Can agricultural traders claim this?
A: Only if they process waste into new products.

Conclusion

Section 80JJA offers excellent incentives for waste-to-wealth businesses, aligning with India’s sustainability goals. To maximize benefits:

• Document all waste sourcing
• Obtain necessary licenses
• File audited financials