Chapter VIIIwas s.80JJA

Section 145 of the Income-tax Act, 2025

Section 145 — Deduction for businesses engaged in collecting and processing of bio-degradable waste. Successor to s.80JJA of the 1961 Act.

Where this section sits

Section 145 is in Chapter VIII — Deductions to Be Made in Computing Total Income, which runs from section 122 to section 154.

← Section 144 · Section 146 →

What this section does

The section gives a deduction where the gross total income of an assessee includes profits and gains derived from the business of collecting and processing or treating bio-degradable waste for any of four purposes: generating power; producing bio-fertilizers, bio-pesticides or other biological agents; producing bio-gas; or making pellets or briquettes for fuel or organic manure. The deduction is equal to the whole amount of such profits and gains, for five consecutive tax years beginning with the tax year in which the business commences.

Why it is there

It is a targeted incentive: the four listed end uses turn waste into power, fuel, fertiliser or biological agents, and a full deduction removes tax from the early years of such a business. The five-year window running from commencement makes the relief one for establishing the activity rather than for carrying it on indefinitely.

Who it applies to

An assessee whose gross total income includes profits and gains derived from the business of collecting and processing or treating bio-degradable waste for one of the four listed purposes

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
Quantum of deduction	The whole amount of such profits and gains	Profits derived from collecting and processing or treating bio-degradable waste for generating power, producing bio-fertilizers, bio-pesticides or other biological agents, producing bio-gas, or making pellets or briquettes for fuel or organic manure	Section 145, closing words
Period of the deduction	Five consecutive tax years	Beginning with the tax year in which such business commences	Section 145, closing words

What this means in practice

The five years are consecutive and run from commencement, not from the first profitable year, so a loss-making start still consumes years of the window. The deduction reaches only profits derived from the listed activity, and the end use must be one of the four in clauses (a) to (d).

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 commences a business of collecting municipal bio-degradable waste and processing it into bio-gas. It makes a loss in its first tax year and profits of Rs. 80 lakh in the second. The whole Rs. 80 lakh is deductible, but the loss-making first year is one of the five, and the deduction ends after the fifth year from commencement.

Where you meet this section

You meet this section as a claim in the deductions schedule of the return, and in an assessment where the Officer tests whether the profits are derived from one of the four listed end uses and which year the business commenced in.

The words themselves

there shall be allowed a deduction equal to the whole amount of such profits and gains for five consecutive tax years, beginning with the tax year in which such business commences

Section 145, Income-tax Act, 2025.

What people get wrong

Counting the five years from the first profitable year. They run from the tax year in which the business commences.
Claiming on total business profits. The deduction reaches only profits derived from the listed activity.
Assuming any waste processing qualifies. Clauses (a) to (d) name four end uses.

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.

80JJA - Deduction in respect of profits and gains from business of collecting and processing of bio-degradable waste

See the full 1961 to 2025 concordance.

Notifications that reach this section

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. 104/2019 [F.No.370142/28/2019-TPL)] /GSR 937(E) — 4 the Gazette of INDIA : Extraordinary [Part Ii—sec. 3(i)] 2019-12-18
S.O.923(E) — A notification under section 80JJA of the Income-tax Act, 1961 1998-10-23

See the notifications index.

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.