Income Tax Act, 2025
Section 4: Subs. by Act 7 of 2017, s. 36, for “five years” (w.e.f. 12018).
4. Subs. by Act 7 of 2017, s. 36, for “five years” (w.e.f. 12018).
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Provided that this condition shall not apply in respect of a start-up which is formed as a result of
the re-establishment, reconstruction or revival by the assessee of the business of any such undertaking
as referred to in section 33B, in the circumstances and within the period specified in that section;
(ii) it is not formed by the transfer to a new business of machinery or plant previously used for
any purpose.
Explanation 1.—For the purposes of this clause, any machinery or plant which was used outside India
by any person other than the assessee shall not be regarded as machinery or plant previously used for any
purpose, if all the following conditions are fulfilled, namely:—
(a) such machinery or plant was not, at any time previous to the date of the installation by the
assessee, used in India;
(b) such machinery or plant is imported into India;
(c) no deduction on account of depreciation in respect of such machinery or plant has been
allowed or is allowable under the provisions of this Act in computing the total income of any person
for any period prior to the date of the installation of the machinery or plant by the assessee.
Explanation 2.—Where in the case of a start-up, any machinery or plant or any part thereof
previously used for any purpose is transferred to a new business and the total value of the machinery
or plant or part so transferred does not exceed twenty per cent of the total value of the machinery or
plant used in the business, then, for the purposes of clause (ii) of this sub-section, the condition
specified therein shall be deemed to have been complied with.
(4) The provisions of sub-section (5) and sub-sections (7) to (11) of section 80-IA shall apply to the
start-ups for the purpose of allowing deductions under sub-section (1).
Explanation.—For the purposes of this section,—
1[(i) “eligible business” means a business carried out by an eligible start up engaged in
innovation, development or improvement of products or processes or services or a scalable business
model with a high potential of employment generation or wealth creation;]
(ii) “eligible start-up” means a company or a limited liability partnership engaged in eligible
business which fulfils the following conditions, namely:—
(a) it is incorporated on or after the 1st day of April, 2016 but before the 1st day of
April, 2[2021];
(b) the total turnover of its business does not exceed twenty-five crore rupees 3[in the
previous year relevant to the assessment year for which deduction under sub-section (1) is
claimed]; and
(c) it holds a certificate of eligible business from the Inter-Ministerial Board of Certification
as notified in the Official Gazette by the Central Government;
(iii) “limited liability partnership” means a partnership referred to in clause (n) of sub-section (1)
of section 2 of the Limited Liability Partnership Act, 2008 (6 of 2009).]
it is not formed by the transfer to a new business of machinery or plant previously used for
any purpose.
Explanation 1.—For the purposes of this clause, any machinery or plant which was used outside India
by any person other than the assessee shall not be regarded as machinery or plant previously used for any
purpose, if all the following conditions are fulfilled, namely:—
such machinery or plant was not, at any time previous to the date of the installation by the
assessee, used in India;
such machinery or plant is imported into India;
no deduction on account of depreciation in respect of such machinery or plant has been
allowed or is allowable under the provisions of this Act in computing the total income of any person
for any period prior to the date of the installation of the machinery or plant by the assessee.
Explanation 2.—Where in the case of a start-up, any machinery or plant or any part thereof
previously used for any purpose is transferred to a new business and the total value of the machinery
or plant or part so transferred does not exceed twenty per cent of the total value of the machinery or
plant used in the business, then, for the purposes of clause
of this sub-section, the condition
specified therein shall be deemed to have been complied with.
The provisions of sub-section
and sub-sections
to
of section 80-IA shall apply to the
start-ups for the purpose of allowing deductions under sub-section
“eligible business” means a business carried out by an eligible start up engaged in
innovation, development or improvement of products or processes or services or a scalable business
model with a high potential of employment generation or wealth creation;]
“eligible start-up” means a company or a limited liability partnership engaged in eligible
business which fulfils the following conditions, namely:—
it is incorporated on or after the 1st day of April, 2016 but before the 1st day of
April, 2[2021];
the total turnover of its business does not exceed twenty-five crore rupees 3[in the
previous year relevant to the assessment year for which deduction under sub-section
is
claimed]; and
it holds a certificate of eligible business from the Inter-Ministerial Board of Certification
as notified in the Official Gazette by the Central Government;
“limited liability partnership” means a partnership referred to in clause
of sub-section
of section 2 of the Limited Liability Partnership Act, 2008 (6 of 2009).]