Circular No. 746

What it does

Confirms that the deduction under section 80Q is available for five assessment years beginning with assessment year 1992-93. Section 80Q, inserted by the Finance (No. 2) Act, 1991 with effect from 1st April 1992, allows a deduction of 20 per cent of profits and gains from a business carried on in India of printing and publication of books, or publication of books, where the gross total income of the previous year relevant to the assessment year commencing 1st April 1992 or any of the four following assessment years includes such profits. Reading that with paragraph 38.2 of the Explanatory Notes on the Finance (No. 2) Act, 1991, which said the concession was revived for five years commencing with assessment year 1992-93, the Board clarifies that the deduction runs for those five years if the other conditions of the section are met.

Why it was issued

Publishers' and booksellers' associations and federations asked how many years the deduction under section 80Q would be available.

Who it reaches

Publishers and printer-publishers of books in India
Booksellers' and publishers' associations that made the representation
Assessing Officers computing the section 80Q deduction
Assessees claiming the deduction after assessment year 1996-97, who are outside it

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.80Q	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.

SECTION 80Q l PROFITS AND GAINS FROM BUSINESS OF PUBLICATION OF BOOKS
608. Whether deduction under section 80Q is to be allowed for five years commencing from assessment year 1992-93 provided the other conditions mentioned in section 80Q are satisfied
Section 80Q inserted by the Finance (No. 2) Act, 1991, with effect from 1-4-1992 provides that where in the case of an assessee the gross total income of the previous year relevant to the assessment year commencing on the 1st day of April, 1992 or to any one of the four assessment years next following that assessment year, includes any profits and gains derived from a business carried on in India of printing and publication of books or publication of books, a deduction from such profits and gains of an amount equal to 20 per cent thereof shall be allowed.
(2) The Board has received representations from various publishers and book-sellers’ associations/federations seeking clarifications as to the number of years the deduction under section 80Q would be available.
(3) Explanatory Notes on Finance (No. 2) Act, 1991, 38.2 read as under :—
"... Keeping in view of the vital role of the publishing industry in the development of human resources, a new section 80Q has been inserted in the Income-tax Act to revive the aforesaid tax concession for five years commencing with the assessment year 1992-93."
(4) It is hereby clarified that deduction under section 80Q of the Income-tax Act is to be allowed for five years commencing from assessment year 1992-93 provided that the other conditions mentioned in the section are satisfied.
Circular : No. 706, dated 26-6-1995, as amended by, Circular No. 746, dated 26-7-1996.

What to watch

The window is five assessment years from 1992-93; the deduction does not continue beyond that, and that period has long since closed.
The deduction is 20 per cent of the profits of the specified business, and only if the gross total income includes those profits.
The other conditions of section 80Q still have to be satisfied; the circular decides the period alone.
The text is Circular No. 706 dated 26th June 1995 as amended by Circular No. 746 dated 26th July 1996.

Where you meet it

In an old assessment or appeal of a publishing house on the number of years for which section 80Q was allowed.

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.

Circular No. 706 — Section 80Q l Profits and Gains from Business of Publication of Books 26 June 1995

← Circular No. 747 · Circular No. 745 →

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