Circular No. 8

What it does

Lists the conditions for a tax credit certificate under section 280ZA, which was enacted to encourage dispersal of industry by giving certificates to public companies that shift an industrial undertaking out of an urban area with the Board's prior approval. Five requirements are set out: the undertaking must be owned by a public company; it must be situated in an area notified as urban by the Central Government under section 280Y by Notification No. S.O. 3419 dated 22-9-1967; application must be made to the Board in Form No. 1 appended to the Tax Credit Certificate (Shifting of Industrial Undertakings) Scheme, 1967; the Board's approval must be obtained before the shifting actually commences; and the shifting must serve a public purpose.

Why it was issued

The Board set out the eligibility requirements so that applicants would know what had to be satisfied before the concession could be claimed.

Who it reaches

Public companies proposing to move a factory out of a notified urban area
Companies preparing an application in Form No. 1 under the 1967 Scheme
Assessing Officers dealing with a tax credit certificate claim

The provisions it speaks to

Left, the provision of the Income-tax Act, 1961 as the instrument itself names it. Right, the section of the Income-tax Act, 2025 that the department’s own concordance maps it to — which is where the same ground is now covered.

Under the 1961 Act	Now
s.1	s.1
s.280Y	no counterpart recorded
s.280ZA	no counterpart recorded

The instrument, as the Board published it

The words below are the department’s own, reproduced from its published text. Where the department’s copy carried a publisher’s notes after the instrument, those are not reproduced.

Requirements to be satisfied by applicants for being eligible for concession envisaged under the section
1. Section 280ZA provides for the issue of tax credit certificates to public companies owning industrial undertakings situated in urban areas if they shift their undertakings to some other areas with the prior approval of the Board.
The obvious purpose for the enactment of section 280ZA is to encourage the dispersal of industries from urban areas.
2. In order to be eligible for the concession envisaged in section 280ZA, the following requirements have to be satisfied by the applicant :
(a) the undertaking proposed to be shifted should be owned by a public company;
(b) the undertaking should be situated in an urban area from where it is to be shifted and which has been notified by the Central Government as such under section 280Y in its Notification No. SO 3419, dated 22-9-1967;
(c) application for the shifting of the industrial undertaking be made to the Board in Form No. 1 appended to the Tax Credit Certificate (Shifting of Industrial Undertakings) Scheme, 1967;
(d) prior approval of the Board before the shifting actually commences, should be obtained; and
(e) the industrial undertaking, by shifting should serve a public purpose.

Circular : No. 8 [F. No. 23/1/69-IT(A-II)], dated 24-3-1969.

What to watch

Approval must come before the shifting begins; an application made after the move has started fails at the threshold.
The undertaking must be in an area actually notified under section 280Y by the 1967 notification, not merely urban in fact.
A private company is outside the concession, however similar the move.
The tax credit certificate provisions in Chapter XXII-B, including sections 280Y and 280ZA, have long since been omitted from the Act, so no fresh claim arises under them.

Where you meet it

On an old claim to a tax credit certificate for shifting a factory, or on the Board's refusal of approval for want of one of the five conditions.

What it names

Forms it names. Form No. 1

On the same provision

Other instruments in this library that name the same provision of the 1961 Act. They are not necessarily still operative, and a later one may have replaced an earlier one without saying so.

Notification No. 70/2026 [F. No. 500/Misc./S10(23FE)/FT&TR-II] / SO 2768(E) : Infrastructure Sub-sector Businesses Notified under Schedule V — 2 the Gazette of INDIA : Extraordinary [Part Ii—sec. 3(ii)] 1 June 2026
Notification No. 17/2023 [F. No. 500/05/2018-FT&TR-III] — Ministry of Finance 6 April 2023
Circular No. 22/2022 — Condonation of delay under section 119 2 b of the income tax act 1961 in filing of form no.10a 1 November 2022
Circular No. 41/2016 — Circular No.41 of 2016 21 December 2016
Notification No. 98/2016 [F. No. 149/144/2015-TPL (Part-II)] / S.O. 3289(E) — [To BE Published in the Gazette of INDIA, Extraordinary, Part-ii, section 3, Sub-section (ii)] 25 October 2016
Notification No. 7/2016 [F.No.173/394/2015-ITA-I] / SO 529(E) — 2 the Gazette of INDIA : Extraordinary [Part Ii—sec. 3(ii)] 19 February 2016

← Circular No. 9 · Circular No. 5 →

A circular binds the department, not you and not a court. The Board issues a circular to its own officers. An assessee may hold the department to a circular that helps him; the department cannot hold an assessee to one that hurts him, and the Tribunal and the courts decide the law for themselves.

Source: the Income Tax Department’s own published text — its page for this instrument.

What this is