Income Tax Act, 2025
Section 4: Subs. by s. 32, ibid., for “ten per cent.” (w.e.f. 12003).
4. Subs. by s. 32, ibid., for “ten per cent.” (w.e.f. 12003).
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(ii) so much of the amount not exceeding 1[fifteen per cent.] of the profits referred to in
sub-clause (i) as is debited to the profit and loss account of the previous year in respect of which
the deduction is to be allowed and credited to a reserve account to be utilised for the purposes of
the business of the assessee in the manner laid down in sub-section (4),
and no deduction shall be allowed in respect of the assessment year beginning on the 1st day of
April, 2005 and any subsequent assessment year]:
2[Provided that a hotel or, as the case may be, a tour operator approved by the prescribed authority on
or after the 30th day of November, 1989 and before the 1st day of October, 1991, shall be deemed to have
been approved by the prescribed authority for the purposes of this section in relation to the assessment
year commencing on the 1st day of April, 1989 or the 1st day of April, 1990 or, as the case may be, the
1st day of April, 1991 if the assessee was engaged in the business of such hotel or as such tour operator
during the previous year relevant to any of the said assessment years.]
(2) This section applies only to services provided to foreign tourists the receipts in relation to which
are received 3[in, or brought into, India by the assessee in convertible foreign exchange within a period of
six months from the end of the previous year or, 4[within such further period as the competent authority
may allow in this behalf]].
5[Explanation6[1].—For the purposes of this sub-section, any payment received by an assessee,
engaged in the business of a hotel or of a tour operator or of a travel agent, in Indian currency obtained by
conversion of foreign exchange brought into India through an authorised dealer, 7[from another hotelier,
tour operator or travel agent, as the case may be,] on behalf of a foreign tourist or group of foreign
tourists, shall be deemed to have been received by the assessee in convertible foreign exchange if the
person making the payment furnishes to the assessee a certificate specified in sub-section (2A).]
8[Explanation 2.—For the purposes of this sub-section, the expression “competent authority” means
the Reserve Bank of India or such other authority as is authorised under any law for the time being in
force for regulating payments and dealings in foreign exchange.]
9[(2A) Every person making payment to an assessee referred to in the 10[Explanation 1] to sub-section
(2) out of Indian currency obtained by conversion of foreign exchange received from or on behalf of a
foreign tourist or a group of foreign tourists shall furnish to that assessee a certificate in the prescribed
form indicating the amount received in foreign exchange, its conversion into Indian currency and such
other particulars as may be prescribed.]
11[(3) For the purposes of sub-section (1), profits derived from services provided to foreign tourists
shall be the amount which bears to the profits of the business (as computed under the head “Profits and
gains of business or profession”) the same proportion as the receipts specified in sub-section (2) 12[as
reduced by any payment, referred to in sub-section (2A), made by the assessee] bear to the total receipts
of the business carried on by the assessee.]
so much of the amount not exceeding 1[fifteen per cent.] of the profits referred to in
sub-clause
as is debited to the profit and loss account of the previous year in respect of which
the deduction is to be allowed and credited to a reserve account to be utilised for the purposes of
the business of the assessee in the manner laid down in sub-section
This section applies only to services provided to foreign tourists the receipts in relation to which
are received 3[in, or brought into, India by the assessee in convertible foreign exchange within a period of
six months from the end of the previous year or, 4[within such further period as the competent authority
may allow in this behalf]].
5[Explanation6[1].—For the purposes of this sub-section, any payment received by an assessee,
engaged in the business of a hotel or of a tour operator or of a travel agent, in Indian currency obtained by
conversion of foreign exchange brought into India through an authorised dealer, 7[from another hotelier,
tour operator or travel agent, as the case may be,] on behalf of a foreign tourist or group of foreign
tourists, shall be deemed to have been received by the assessee in convertible foreign exchange if the
person making the payment furnishes to the assessee a certificate specified in sub-section
Every person making payment to an assessee referred to in the 10[Explanation 1] to sub-section
out of Indian currency obtained by conversion of foreign exchange received from or on behalf of a
foreign tourist or a group of foreign tourists shall furnish to that assessee a certificate in the prescribed
form indicating the amount received in foreign exchange, its conversion into Indian currency and such
other particulars as may be prescribed.]
11[
For the purposes of sub-section
12[as
reduced by any payment, referred to in sub-section