1. CA. Rajat Mohan B.Com(H),ACA, ACS, DISA 1 Tax Planning through Investments SECTION 10BA SPECIAL PROVISIONS IN RESPECT OF EXPORT OF CERTAIN ARTICLES OR THINGS.

2. MOHAN AGGARWAL & ASSOCIATES Chartered Accountants 2

3. 3 (A). TAXPAYER CATEGORY- SECTION 10BA This deduction is available to all categories of taxpayers.

4. MOHAN AGGARWAL & ASSOCIATES Chartered Accountants 4 (B).CONDITIONS -SECTION 10BA (1). Profits and gains as are derived by an undertaking from the export out of India of eligible articles or things. (2).Where deduction under section 10A or section 10B has been claimed, the undertaking shall not be entitled to the deduction under this section. (3). No deduction shall be allowed under this section to any undertaking for the assessment year beginning on and after 1 April, 2010.

5. MOHAN AGGARWAL & ASSOCIATES Chartered Accountants 5 (4). New Business undertaking criteria — Eligible undertaking shall not be formed by splitting up, or the reconstruction, of a business already in existence. However, this condition shall not apply in respect of an undertaking which is formed as a result of the re-establishment, reconstruction or revival by the assessee of the business of any such undertaking as is referred to in section 33B (5).90% or more of its total sales (includes export sales and domestic sales) are by way of exports of the eligible articles or things. (6).Employs 20 or more workers during the previous year in the process of manufacture or production. (B).CONDITIONS -SECTION 10BA

6. MOHAN AGGARWAL & ASSOCIATES Chartered Accountants 6 (B).CONDITIONS -SECTION 10BA (7)New Plant and Machinery criteria — Eligible Undertaking shall not be formed by the inward transfer to a new business of machinery or plant previously used for any purpose. This condition shall be deemed to be complied with if value of used machinery or plant or any part thereof transferred to a new business does not exceed 20% of the total value of the machinery or plant used in the business. Any machinery or plant used outside India by any person other than the assessee shall not be regarded as machinery or plant previously used for any purpose, if the following conditions are fulfilled:

7. MOHAN AGGARWAL & ASSOCIATES Chartered Accountants 7 (i)Such machinery or plant was not, at any time previous to the date of the installation by the assessee, used in India; (ii)Such machinery or plant is imported into India from any country outside India; and (iii)No deduction on account of depreciation in respect of such machinery or plant has been allowed or is allowable under the provisions of this Act in computing the total income of any person for any period prior to the date of the installation of machinery or plant by the assessee. (B).CONDITIONS -SECTION 10BA

8. MOHAN AGGARWAL & ASSOCIATES Chartered Accountants 8 (8) Repatriation of foreign exchange criteria — Sale proceeds of eligible articles or things exported out of India are received in, or brought into, India by the assessee in convertible foreign exchange, within a period of 6 months from the end of the previous year (or such further period as the competent authority may allow in this behalf). Reserve Bank of India or such other authority as is authorized under any law for the time being in force for regulating payments and dealings in foreign exchange. (B).CONDITIONS -SECTION 10BA

9. MOHAN AGGARWAL & ASSOCIATES Chartered Accountants 9 (9) Dual deduction is not allowed criteria — No deduction shall be allowed under any section in respect of such export profits of the undertaking. Where for any assessment year, deduction under section 10A or section 10B has been claimed, the undertaking shall not be entitled to the deduction under this section. (B).CONDITIONS -SECTION 10BA

10. MOHAN AGGARWAL & ASSOCIATES Chartered Accountants 10 (C).AMOUNT OF DEDUCTION - SECTION 10BA Deduction shall be 100% of the Profits derived from export of eligible articles or things.

11. MOHAN AGGARWAL & ASSOCIATES Chartered Accountants 11 Profits derived from export of eligible articles or things shall be the amount which bears to the profits of the business of the undertaking, the same proportion as the export turnover in respect of such articles or things or computer software bears to the total turnover of the business carried on by the undertaking. CALCULATION OF ‘PROFITS DERIVED FROM EXPORTS’ SECTION 10BA In other words formula for calculating Profits derived from exports shall be Export Turnover of the undertaking to which section 10BA applies X Profits of such undertaking Total Turnover of the undertaking to which section 10BA applies

12. MOHAN AGGARWAL & ASSOCIATES Chartered Accountants 12 (i)‘Convertible foreign exchange’ means foreign exchange which is for the time being treated by the Reserve Bank of India as convertible foreign exchange for the purposes of the Foreign Exchange Management Act, 1999, and any rules made there under or any other corresponding law for the time being in force. ii)‘Eligible articles or things’ means all hand-made articles or things, which are of artistic value and which requires the use of wood as the main raw material. iii)‘Export turnover’ means the consideration in respect of export by the undertaking of eligible articles or things received in, or brought into, India by the assessee in convertible foreign exchange in accordance with sub-section (3), but does not include freight, telecommunication charges or insurance attributable to the delivery of the articles or things outside India. (E).MEANING – SECTION 10BA

13. MOHAN AGGARWAL & ASSOCIATES Chartered Accountants 13 iv)‘Export out of India’ shall not include any transaction by way of sale or otherwise, in a shop, emporium or any other establishment situate in India, not involving clearance of any customs station as defined in the Customs Act, 1962. (E).MEANING – SECTION 10BA

14. 14 THANK YOU Your comments and suggestions are of utmost importance and are always welcomed. CA. Rajat Mohan B.Com(H), ACA, ACS, DISA MOHAN AGGARWAL & ASSOCIATES Chartered Accountants Head Office F-31 D.B. Gupta Market, Karol Bagh, New Delhi-110005 Office Phone: 011-23672609 / 23535809 Branch Office 18A, IInd Floor, North Avenue Road, West Punjabi Bagh, New Delhi-110026 office Phone: 011-47322696/97 Website: www.delhicamohan.com E-mail: rajat.mohan@icai.orgrajat.mohan@icai.org