Effluent treatment and conveyance system Infrastructure facility – exemption under Section 80-IA of the Income-tax Act

By Vijay Kumar

Under Section 80-IA of the Income-tax Act, 100% deduction of profits and gains derived by an enterprise carrying on the business of

(i) developing or

(ii) operating and maintaining or

(iii) developing, operating and maintaining any infrastructure is allowed. Under this section infrastructure facility means

(i) a road including toll road, a bridge or a rail system;

(ii) a highway project including housing or other activities being an integral part of the highway project;

(iii) a water supply project, water treatment system, irrigation project, sanitation and sewerage system or solid waste management system; and

(iv) a port, airport, inland waterway or inland port.

The deduction is available for any ten consecutive assessment years out of twenty assessment years beginning from the year in which the enterprise develops and begins to operate any infrastructure facility.

Now the Board has clarified that effluent treatment and conveyance system is to be treated as an infrastructure facility for the purposes of tax benefit as it is a part of water treatment system.

CIRCULAR NO. 1/2006, Dated: January 12, 2006