Sub-section (1) is the allowance: where the gross total income of an assessee includes profits and gains derived by an undertaking to which the section applies from a business referred to in sub-section (2), a deduction of an amount equal to 100% of those profits and gains is allowed for ten consecutive tax years commencing with the initial tax year.
Sub-section (2) fixes the class of undertaking by reference to a closed window: the undertaking must, during the period beginning 1 April 2007 and ending before 1 April 2017, have begun or begin, in any of the North-Eastern States, to manufacture or produce an eligible article or thing, to undertake substantial expansion to do so, or to carry on an eligible business. Sub-section (3) adds two negative conditions — the undertaking must not be formed by splitting up or reconstruction of an existing business (other than one re-established, reconstructed or revived under section 140(4) in the circumstances and within the period specified there), and must not be formed by transfer to a new business of previously used machinery or plant. Sub-section (4) applies section 140(5) and (6) to that second condition.
Sub-section (5) bars any other deduction under Chapter VIII in relation to the profits and gains of the undertaking. Sub-section (6) caps the total period of deduction, inclusive of any period of deduction under this section or under the second proviso to section 80-ib(4) of the Income-tax Act, 1961, at ten tax years. Sub-section (7) applies section 140(7) to (15) to an eligible undertaking so far as may be.
Sub-section (8) defines the terms. An "eligible article or thing" is anything other than tobacco and manufactured tobacco substitutes under Chapter 24, pan masala under Chapter 21, plastic carry bags of less than twenty microns as specified in the two notifications named, and Chapter 27 goods produced by petroleum oil or gas refineries. "Eligible business" is a closed list of eight — a hotel not below two star category, adventure and leisure sports including ropeways, medical and health services in the nature of a nursing home with a minimum capacity of twenty-five beds, an old-age home, a vocational training institute in the named fields, an information technology related training centre, manufacture of information technology hardware, and bio-technology. The "initial tax year" is the year in which the undertaking begins to manufacture or produce, or completes substantial expansion. The "North-Eastern States" are Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim and Tripura. "Substantial expansion" means an increase in investment in plant and machinery of at least 25% of the book value of plant and machinery, before taking depreciation in any year, as on the first day of the tax year in which the expansion is undertaken.
Why it is there
The deduction was an incentive to put manufacturing and a defined set of service businesses into the eight North-Eastern States within a fixed decade. The conditions in sub-section (3) exist so the incentive buys new capacity rather than a relabelled existing business, and sub-sections (5) and (6) prevent the same profits attracting a second Chapter VIII deduction or a period longer than ten years when combined with the corresponding relief already claimed under the 1961 Act.
Who it applies to
An assessee whose gross total income includes profits of a qualifying North-Eastern undertaking
An undertaking that began manufacture or production, substantial expansion, or an eligible business in a North-Eastern State within the 1 April 2007 to before 1 April 2017 window
An undertaking that had claimed deduction under the second proviso to section 80-ib(4) of the Income-tax Act, 1961
The figures, and what each one turns on
Read the condition in the same row. A figure quoted without it is a wrong answer with a citation attached.
What
Figure
The condition on it
Where
Rate of deduction
100% of the profits and gains derived from the business
Where gross total income includes profits derived by an undertaking to which the section applies from a business referred to in sub-section (2)
Sub-section (1)
Period of deduction
Ten consecutive tax years
Commencing with the initial tax year, being the year the undertaking begins to manufacture or produce or completes substantial expansion
Sub-section (1) with sub-section (8)(c)
Window for beginning the activity
On or after 1 April 2007 and before 1 April 2017
The undertaking must have begun or begin manufacture or production, substantial expansion, or an eligible business in a North-Eastern State in that period
Sub-section (2)
Outer cap on the total period of deduction
Ten tax years
Inclusive of the period of deduction under this section and under the second proviso to section 80-ib(4) of the Income-tax Act, 1961
Sub-section (6)
Threshold for substantial expansion
At least 25% of the book value of plant and machinery
Book value before taking depreciation in any year, as on the first day of the tax year in which the substantial expansion is undertaken
Sub-section (8)(e)
Minimum standard for a hotel as an eligible business
Not below two star category
Business of hotel
Sub-section (8)(b)(i)
Minimum capacity for a nursing home as an eligible business
Twenty-five beds
Providing medical and health services in the nature of a nursing home
Sub-section (8)(b)(iii)
Thickness below which plastic carry bags are not an eligible article or thing
Less than twenty microns
As specified by the Ministry of Environment and Forests in notifications S.O. 705(E) dated 2 September 1999 and S.O. 698(E) dated 17 June 2003
Sub-section (8)(a)(iii)
What this means in practice
The entry window closed before 1 April 2017, so nothing new can qualify; what the section still does is run out the ten-year period for undertakings that entered in time, and sub-section (6) counts any years already taken under the second proviso to section 80-ib(4) of the 1961 Act towards that same ten. Substantial expansion is a separate route in and it resets the initial tax year under sub-section (8)(c), but only if the investment in plant and machinery rises by at least 25% of book value before depreciation as on the first day of that year. Sub-section (5) is absolute — profits that get this deduction get no other deduction under Chapter VIII — and the negative conditions in sub-section (3), read with section 140(5) and (6) through sub-section (4), are where claims most often fail, because moving used plant into the new undertaking disqualifies it.
An example
Illustrative only, and invented for this page. The figures are chosen to show the rule biting, not taken from any real matter.
A company sets up an undertaking in Meghalaya that begins manufacturing an eligible article in the tax year 2016-17, within the sub-section (2) window, with no used plant transferred to it and no splitting up of an existing business. That year is the initial tax year, and 100% of the profits derived from that business are deducted for ten consecutive tax years. If the company had already claimed the corresponding deduction for four years under the second proviso to section 80-ib(4) of the 1961 Act for the same undertaking, sub-section (6) allows only six further years here, since the total inclusive period cannot exceed ten tax years.
Where you meet this section
You meet it in the Chapter VIII deduction schedule of the return and in the accompanying claim for the undertaking's profits, and in an assessment order testing whether the undertaking was formed by splitting up or by transfer of used plant, or whether the ten-year inclusive cap in sub-section (6) has been exhausted.
The words themselves
a deduction of an amount equal to 100% of the profits and gains derived from such business for ten consecutive tax years commencing with the initial tax year
Section 143(1), Income-tax Act, 2025.
during the period beginning on the 1st April, 2007 and ending before the 1st April, 2017, has begun or begins, in any of the North-Eastern States
Section 143(2), Income-tax Act, 2025.
"substantial expansion" means increase in the investment in the plant and machinery by at least 25% of the book value of plant and machinery (before taking depreciation in any year), as on the first day of the tax year in which the substantial expansion is undertaken
Section 143(8)(e), Income-tax Act, 2025.
What people get wrong
Treating the section as open to a new undertaking. Sub-section (2) requires the activity to have begun before 1 April 2017.
Counting ten fresh years despite an earlier claim. Sub-section (6) caps the total period, inclusive of deduction under the second proviso to section 80-ib(4) of the 1961 Act, at ten tax years.
Claiming another Chapter VIII deduction on the same profits. Sub-section (5) bars any other deduction under that Chapter in relation to the undertaking's profits and gains.
Measuring substantial expansion against written down value. Sub-section (8)(e) measures the 25% against book value of plant and machinery before taking depreciation in any year, as on the first day of that tax year.
Assuming any business in a North-Eastern State qualifies. Sub-section (8)(b) lists eight eligible businesses, and sub-section (8)(a) excludes four categories of article or thing from manufacture or production.
Overlooking used machinery. Sub-section (3)(b), read with section 140(5) and (6) through sub-section (4), disqualifies an undertaking formed by transfer to a new business of previously used machinery or plant.
What this replaced
The correspondence is the Income Tax Department’s own, from its comparison utility for the 1961 and 2025 Acts. A renumbering is the easy half; whether the words changed is the half that decides cases.
80-IE - Special provisions in respect of certain undertakings in North-Eastern States
Rules of the Income-tax Rules, 2026 that work section 143. Where the rule’s own heading names the section we say so; the rest are marked on reading the rule, which is our derivation and not the department’s. A rule that serves the section silently and that we have missed will not appear here.
Rule 66 — Furnishing of audit report for claiming deduction under section 46 or 138 or 139 or 140 or 141 or 142 or 143 or 144 — on reading the rule
A circular binds the department, not you and not a court. Every one below was written under the 1961 Act; it reaches this section because the department’s own concordance carries the provision it names to this one.
Circular No. 13/2023 — Condonation of delay under clause (b) of sub-section (2) of section 119 of the Income-tax Act, 1961 for returns of income claiming 2023-07-26
Circular 1/2015 — Explanatory notes to the provisions of the finance no.2 act 2014 2015-01-21
Circular No. 10/2014 [F.No.178/84/2012-ITA-I] — Section 80-IA, sub-clause (iii) of sub-section (4) of the Income-tax Act, 1961 - Deductions - Profits and gains from industrial un 2014-05-06
Circular No. 10/2005 — Definition of "Port" as Infrastructural Facility for the Purpose of Sections 10(23G) and 80-IA of the Income-tax Act, 1961 2005-12-16
Circular No. 7/2002 — Section 80-IA l Profits and Gains from Industrial Undertakings, ETC., Engaged in Infrastructure Development, ETC 2002-08-26
Circular No. 788 — Section 80-IB l Profits and Gains from Certain Industrial Undertakings Other Than Infrastructure Development Undertakings 2000-04-11
Circular No. 733 — 565-567. Whether Build-Own-Lease-Transfer (BOLT) Scheme of Indian Railways shall be eligible for benefit under section 80-IA, sinc 1996-01-03
Circular No. 731 — 604. Eligibility for deduction under section 80-O in case of receipt of brokerage by reinsurance agent, operating in India on beha 1995-12-20
Circular No. 705 — 613. Procedure regarding grant of approval under section 80 RRA 1995-06-20
Circular No. 700 — 603. Whether benefit of section 80-O would be available if technical and professional services, though rendered outside India, are 1995-03-23
Circular No. 683 — Section 80 l Loss - Submission of Return for 1994-06-08
Circular No. 575 — 545. Whether ‘convertible foreign exchange’ does not include remittances from Nepal and Bhutan 1990-08-31
Circular No. 533 — 602. Application for approval of agreement to be made in prescribed form and verified in prescribed manner 1989-03-27
Circular No. 246 — Section 8OU l Totally Blind or Physically Handicapped Persons 1978-09-20
Circular No. 187 — Section 80-O l RO Yalties, ETC., from Certain Foreign Enterprises 1975-12-23
Circular No. 57 — Section 80-I l Profits and Gains from Industries After Certain Date 1971-03-23
A notification is made under a power the Act gives and, within that power, is law. These too were made under the 1961 Act and are placed here by the department’s concordance.
Notification No. 01/2013 — Section 80-IA, Sub-clause (iii) of sub-section (4) of the Income-tax Act, 1961 - Deductions - In respect of profits and gains from 2013-01-08
Notification No. 48/2012 — Section 80-IA, Sub-clause (iii) of Sub-section (4) of the Income-tax Act, 1961 - Deductions - in Respect of Profits and Gains from 2012-11-06
Notification No. 47/2012 — Section 80-IA, Sub-clause (iii) of Sub-section (4) of the Income-tax Act, 1961 - Deductions - in Respect of Profits and Gains from 2012-11-06
Notification No. 17/2012 — Section 80-IA of the Income-tax Act, 1961 - Deductions - Profits and gains from industrial infrastructure undertakings, etc. - Not 2012-05-11
Notification No. 13/2012 — Section 80-IA of the Income-tax Act, 1961 - Deductions - Profits and Gains from Industrial Infrastructure Undertakings, ETC. - Not 2012-03-22
Notification No. 10/2012 — Section 80-IA of the Income-tax Act, 1961 - Deductions - Profits and gains from industrial infrastructure undertakings, etc. - Not 2012-02-21
Notification No. 11/2011 — Income-tax : Section 80-IA of the Income-tax Act, 1961 - Deductions - Profits and gains from industrial infrastructure undertaking 2011-02-24
Notification No. 47 — Section 80-IA of the Income-tax Act, 1961 - Deductions - Profits and gains from industrial infrastructure undertakings, etc. - Not 2010-07-09
Notification No. 80 — Section 80-IA of the Income-tax Act, 1961 – Deductions – Profits and gains from industrial undertakings, etc, - Notified undertaki 2009-10-27
Notification No. 106 — Industrial Park Scheme, 2008 - Amendments in Form Ips-1 2008-11-28
Notification No. 98 — Income-tax (Eighth Amendment) Rules, 2008 - Insertion of rule 18DDA and Form No. 10CCBD 2008-10-22
Notification No. 89 — Section 80-IC (2)(A) of the Income-tax Act 1961 – Deduction – Special Provision in Respect of Certain Undertakings or Enterprises 2008-08-27
Notification No. 76 — A notification under section 10A of the Income-tax Act, 1961 2008-07-02
Notification No. 66 — Following undertakings notified under section 80 2008-05-30
Notification No. 03 — A notification under section 80 of the Income-tax Act, 1961 2008-01-08
Notification No. 02 — Amendment of the Income-tax Rules under section 80 of the Income-tax Act, 1961 2008-01-08
Notification No. 281 — Amendment of the Income-tax Rules under section 80 of the Income-tax Act, 1961 2007-11-27
Notification No. 211 — Section 80-IA(4)(iii) of the Income-tax Act, 1961 - Deductions - In respect of profits and gains from industrial undertakings, etc 2007-07-31
Notification No. 67 — Amendment of the Income-tax Rules under section 32 of the Income-tax Act, 1961 2005-02-28
Notification No. 58 — Amendment of the Income-tax Rules under section 40A of the Income-tax Act, 1961 2005-02-17
Notification No. 43 — Amendment of the Income-tax Rules under section 80 of the Income-tax Act, 1961 2005-02-04
Notification No. 142 — Amendment of the Income-tax Rules under section 80 of the Income-tax Act, 1961 2004-04-19
Notification No. 49 — A notification under section 3 of the Income-tax Act, 1961 2004-02-13
Notification No. 41 — Industrial areas in the State of Sikkim in column (2) of the Schedule below notified under section 80 2004-02-06
Notification No. 292 — Amendment of the Income-tax Rules under section 23 of the Income-tax Act, 1961 2003-11-13
Notification No. 156 — Amendment of the Income-tax Rules under section 80 of the Income-tax Act, 1961 2003-06-18
Notification: 124 Date of Issue : 31/5/2002 — 4. The percentage of land to be earmarked for commercial use shall not be more than 10 per cent of the allocable area. 2002-05-31
Notification No. 85E- — A notification under section 80 of the Income-tax Act, 1961 2001-01-31
Notification No. 24- — A notification under section 80 of the Income-tax Act, 1961 2001-01-31
Notification No. 1692 — Multilevel Computerised Car Parking as infrastructure facility notified under section 10 2000-07-13
Notification No. 285(E) — An undertaking developed and being maintained and operated by Western India Kinfra Ltd notified under section 80 2000-03-28
Notification No. 11291 — An undertaking developed and being maintained and operated by M/s International Tech Park Limited notified under section 80 2000-03-28
Notification No. 11185 — An undertaking developed and being maintained and operated by the Wise Industrial Park Limited notified under section 80 1999-12-28
Notification No. 11174 — A notification under section 80 of the Income-tax Act, 1961 1999-12-20
Notification No. 11103 — A notification under section 80 of the Income-tax Act, 1961 1999-10-06
Notification No. 11102 — A notification under section 80 of the Income-tax Act, 1961 1999-10-06
Notification No. 11022 — Following industries in the North-Eastern Region to be the industries notified under section 80 1999-08-04
S.O. 627(E) — Following industries in the North-Eastern Region to be the industries notified under section 80 1999-08-04
Notification No. 10963 — A notification under section 80 of the Income-tax Act, 1961 1999-06-16
S.O. 447(E) — A notification under section 80 of the Income-tax Act, 1961 1999-06-16
Notification No. 10958 — A notification under section 80 of the Income-tax Act, 1961 1999-06-15
Notification No. 10957 — A notification under section 80 of the Income-tax Act, 1961 1999-06-15
S.O. 440(E) — A notification under section 80 of the Income-tax Act, 1961 1999-06-15
S.O. 439(E) — A notification under section 80 of the Income-tax Act, 1961 1999-06-15
Notification No. 10956 — A notification under section 80 of the Income-tax Act, 1961 1999-06-14
Notification No. 10955 — A notification under section 80 of the Income-tax Act, 1961 1999-06-14
S.O. 435(E) — A notification under section 80 of the Income-tax Act, 1961 1999-06-14
S.O. 434(E) — A notification under section 80 of the Income-tax Act, 1961 1999-06-14
S.O. 401(E) — A notification under section 80 of the Income-tax Act, 1961 1999-05-31
Notification No. 10942 — A notification under section 7 of the Income-tax Act, 1961 1999-05-28
S.O. 391(E) — A notification under section 80 of the Income-tax Act, 1961 1999-05-28
Read this before you rely on it. Every decision below was decided under the Income-tax Act, 1961. It appears here because it is tagged to a 1961 provision that the department’s own mapping carries to section 143. That is an inference we have drawn, not a holding on the new section: where the words changed in the move, the reasoning may not survive. Treat this as the place to start looking, not as authority on the 2025 Act.
Liberty India v CITSupreme CourtHelps departmenttagged s.80-IB Can I count depb credits and duty drawback in the profits for my 80-ib deduction?
PCIT v Wipro LtdSupreme CourtHelps departmenttagged s.80 A declaration was required by the due date and you filed it late. Is that fatal?
Balaji Landmarks LLP v CBDTHigh CourtHelps taxpayertagged s.80 I filed my loss return late on my ca's advice and lost the carry-forward. Will the delay be condoned?
Coromondel Cabeles (P) Ltd v ACITHigh CourtCuts both waystagged s.80-IB(10) I never claimed section 80-ib(10) in my return under section 139(1). Can the High Court still let me have the deduction in a section 260A appeal?
Gateway Terminals India v DCITHigh CourtHelps taxpayertagged s.80-IA Does interest on fixed deposits I was obliged to make for the eligible business, and interest on the refund of TDS my customers wrongly deducted…
Ranbaxy Laboratories Ltd v CITHigh CourtHelps taxpayertagged s.80-I Same point, in Delhi: if the recorded grounds fail, can the officer still tax an unrelated item?
ACIT v Monarch Innovative TechnologiesITATHelps taxpayertagged s.80-IC My return went in by the due date but I claimed the deduction for the first time in a revised return. Does section 80AC block the claim?
What this page does not tell you. It does not reproduce the section. Everything above was written from the section’s own text as the Income Tax Department publishes it — the text is here, and nothing here is advice on your facts. Where a figure matters, read the sub-section it comes from.