Section 80LA

Section 80LA — the law in short

What the courts have decided on section 80LA, in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• Statutory position — section 9A(8A): the conditions can be switched off for a fund manager located in an IFSC, if he commenced operations by 31 March 2030 CBDT Circulars & InstructionsCuts both ways
  Our fund manager is being set up in GIFT City rather than in Mumbai. Does that make any difference to the section 9A conditions?
  It can, but only through a notification. Section 9A(8A) empowers the Central Government, by notification in the Official Gazette, to specify that any one or more of the conditions in clauses (a) to (m) of section 9A(3) or clauses (a) to (d) of section 9A(4) shall not apply, or shall apply with such modifications as the notification specifies, in the case of an eligible investment fund and its eligible fund manager where the manager is located in an International Financial Services Centre and has commenced its operations on or before 31 March 2030. The relaxation is not automatic: without a notification covering the condition in question, every condition continues to apply in full.
• Statutory position — section 80LA: a unit in an IFSC gets one hundred per cent for ten consecutive years out of fifteen, at its option CBDT Circulars & InstructionsCuts both ways
  My client has set up a unit in GIFT City. What exactly is the section 80LA deduction, how long does it last, and what has to go with the return?
  Section 80LA(1A) allows a Unit of an International Financial Services Centre a deduction of one hundred per cent of the income referred to in section 80LA(2), for any ten consecutive assessment years, at the option of the assessee, out of fifteen years beginning with the assessment year relevant to the previous year in which the permission or registration was obtained. The permission or registration counted for that starting point is one under clause (a) of section 23(1) of the Banking Regulation Act 1949, or under the Securities and Exchange Board of India Act 1992, or under the International Financial Services Centres Authority Act 2019.
• Statutory position — section 80AC and section 115JC: a late return destroys the section 80LA claim, and AMT still bites at nine per cent CBDT Circulars & InstructionsCuts both ways
  We missed the section 139(1) due date by a week and the IFSC unit's whole income is covered by section 80LA. Is the deduction still available, and does alternate minimum tax apply on top?
  On the first question, no. Section 80AC provides that for an assessment year commencing on or after 1 April 2018, where any deduction is admissible under any provision of Chapter VI-A under the heading 'C.—Deductions in respect of certain incomes', no such deduction shall be allowed unless the assessee furnishes a return of his income for that assessment year on or before the due date specified under section 139(1). Section 80LA sits in that Part of Chapter VI-A, so a return filed even a day late costs the whole deduction. On the second, alternate minimum tax under section 115JC does apply to a person other than a company, and section 115JC(2)(i) adds back deductions claimed under any section in that same Part C — but section 115JC(4)(i) substitutes nine per cent for eighteen and one-half per cent where the person is a unit located in an International Financial Services Centre deriving its income solely in convertible foreign exchange.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.