Income Tax Act, 2025
Section 4: Ins. by Act 12 of 1990, s. 20 (w.e.f. 11990).
4. Ins. by Act 12 of 1990, s. 20 (w.e.f. 11990).
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(iii) it is not formed by the transfer to a new business of machinery or plant previously used for
any purpose in any backward area;
(iv) it employs ten or more workers in a manufacturing process carried on with the aid of power,
or employs twenty or more workers in a manufacturing process carried on without the aid of power.
Explanation.—Where any machinery or plant or any part thereof previously used for any purpose in
any backward area is transferred to a new business in that area or in any other backward area 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 (iii) of this sub-section, the
condition specified therein shall be deemed to have been fulfilled.
(3) This section applies to the business of any hotel, where all the following conditions are fulfilled,
namely:—
(i) the business of the hotel has started or starts functioning after the 31st day of December, 1970
1[but before the 1st day of April, 1990], in any backward area;
(ii) the business of the hotel is not formed by the splitting up, or the reconstruction, of a business
already in existence;
(iii) the hotel is for the time being approved for the purposes of this sub-section by the Central
Government.
(4) The deduction specified in sub-section (1) shall be allowed in computing the total income in
respect of each of the ten assessment years beginning with the assessment year relevant to the previous
year in which the industrial undertaking begins to manufacture or produce articles or the business of the
hotel starts functioning:
Provided that,—
(i) in the case of an industrial undertaking which has begun to manufacture or produce articles,
and
(ii) in the case of the business of a hotel which has started functioning,
after the 31st day of December, 1970, but before the 1st day of April, 1973, this sub-section shall have
effect as if the reference to ten assessment years were a reference to ten assessment years as reduced by
the number of assessment years which expired before the 1st day of April, 1974.
(5) Where the assessee is a person other than a company or a co-operative society, the deduction
under sub-section (1) shall not be admissible unless the accounts of the industrial undertaking or the
business of the hotel for the previous year relevant to the assessment year for which the deduction is
claimed have been audited by an accountant as defined in the Explanation below sub-section (2) of
section 288 and the assessee furnishes, along with his return of income, the report of such audit in the
prescribed form duly signed and verified by such accountant.
it is not formed by the transfer to a new business of machinery or plant previously used for
any purpose in any backward area;
it employs ten or more workers in a manufacturing process carried on with the aid of power,
or employs twenty or more workers in a manufacturing process carried on without the aid of power.
Explanation.—Where any machinery or plant or any part thereof previously used for any purpose in
any backward area is transferred to a new business in that area or in any other backward area 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 fulfilled.
This section applies to the business of any hotel, where all the following conditions are fulfilled,
namely:—
the business of the hotel has started or starts functioning after the 31st day of December, 1970
1[but before the 1st day of April, 1990], in any backward area;
the business of the hotel is not formed by the splitting up, or the reconstruction, of a business
already in existence;
the hotel is for the time being approved for the purposes of this sub-section by the Central
Government.
The deduction specified in sub-section
shall be allowed in computing the total income in
respect of each of the ten assessment years beginning with the assessment year relevant to the previous
year in which the industrial undertaking begins to manufacture or produce articles or the business of the
hotel starts functioning:
Provided that,—
in the case of an industrial undertaking which has begun to manufacture or produce articles,
and
in the case of the business of a hotel which has started functioning,
after the 31st day of December, 1970, but before the 1st day of April, 1973, this sub-section shall have
effect as if the reference to ten assessment years were a reference to ten assessment years as reduced by
the number of assessment years which expired before the 1st day of April, 1974.
Where the assessee is a person other than a company or a co-operative society, the deduction
under sub-section
shall not be admissible unless the accounts of the industrial undertaking or the
business of the hotel for the previous year relevant to the assessment year for which the deduction is
claimed have been audited by an accountant as defined in the Explanation below sub-section
of
section 288 and the assessee furnishes, along with his return of income, the report of such audit in the
prescribed form duly signed and verified by such accountant.