Five High Demandable and Tax-Free Business
Dear Businessman /Investors
Are you searching for a business that required Low Investment, High Demandable, Tax Free and Eligible for Subsidies then this blog is going to fulfillment your search.
In Today’s World, where sustainability and environmental conservation are paramount, the Government Of India has introduced several incentives to promote eco-friendly business practices. One such significant provision is Section 80JJA of the Income Tax Act, 1961.
This section offers a valuable tax deduction for businesses engaged in specific activities related to waste management and renewable energy.
In this Blog, we will know about the details of Section 80JJA, exploring how it benefits businesses and contributes to a greener future.
1. What is Section 80JJA?
Section 80JJA of the Income Tax Act, 1961, provides a tax deduction on profits and gains derived from businesses that focus on environmentally beneficial activities. This deduction is specifically aimed at encouraging enterprises that deal with Biodegradable Waste and produce eco-friendly products.
Here’s a closer look at the qualifying business activities:
(i) Collecting and Processing of Bio-degradable Waste for Power Generation: Businesses involved in collecting and processing biodegradable waste to generate power can avail themselves of this deduction. This not only helps in waste management but also promotes the generation of renewable energy, reducing reliance on fossil fuels.
(ii) Producing Bio-fertilizers and Bio-pesticides: The production of bio-fertilizers and bio-pesticides is another qualifying activity. These products are essential for sustainable agriculture as they minimize the use of chemical fertilizers and pesticides, promoting healthier soil and crops.
(iii) Generating Bio-gas or Compressed Bio Gas (CBG): Bio-gas and CBG are produced from organic waste and serve as clean energy sources. Businesses engaged in generating these gases can benefit from the tax deduction, fostering the use of alternative fuels that have lower environmental impacts.
(iv) Making Pellets or Briquettes for Fuel: The creation of pellets or briquettes from agricultural or biodegradable waste is included under this section. These products serve as an eco-friendly alternative to conventional fuels, helping reduce deforestation and carbon emissions.
(v) Producing Organic Manure: Organic manure production from biodegradable waste contributes to sustainable farming practices. By enhancing soil fertility without harmful chemicals, it supports long-term agricultural productivity and environmental health.
2. Duration of the Deduction: The tax deduction under Section 80JJA is allowed for a period of Five (5) consecutive assessment years. This period begins with the assessment year relevant to the previous year in which the business commences its qualifying activities.
For example, if a business starts its operations in the financial year 2023-24, the deduction period will begin from the assessment year 2024-25 and continue until the assessment year 2028-29.
3. How to Avail the Deduction: To claim the deduction under Section 80JJA, businesses must ensure they comply with the following requirements:
(i) Maintain proper books of accounts and records of the qualifying activities.
(ii) Get the accounts audited by a Chartered Accountant.
(iii) Submit the audit report along with the income tax return.
By meeting these conditions, businesses can reduce their taxable income, thereby lowering their tax liability and freeing up capital for further investment in sustainable practices.
4. Benefits of Section 80JJA:
a. Financial Incentive: The primary benefit is the significant tax savings, which can improve the financial health of businesses engaged in eco-friendly activities.
b. Environmental Impact: By promoting the processing of biodegradable waste and the production of sustainable products, Section 80JJA contributes to environmental conservation and the reduction of pollution.
c. Encouragement for Green Innovation: This tax provision encourages businesses to innovate and develop new technologies and processes that support a sustainable future.
d. Support for Sustainable Agriculture: The production of bio-fertilizers, bio-pesticides, and organic manure helps promote sustainable agricultural practices, benefiting farmers and the agricultural sector.
5. Subsidy benefits on Eligible Business:
The business covered under section 80JJA has also attracts the Govt. Subsidy such as:
(i) Interest Subsidy on Bank Term Loan under Agriculture Infrastructure Fund of Ministry of Agriculture of Govt. of India.
(ii) Capital Grants/Subsidies from Ministry of Renewable Energy of Govt. of India.
(iii) Capacity based incentives from Central Pollution Control Board of Govt. of India.
(iv) State Specific MSME Incentives
Conclusion :
Section 80JJA of the Income Tax Act, 1961, is a forward-thinking provision that not only offers substantial tax benefits to businesses but also aligns with the global push towards sustainability. By incentivizing activities that manage waste and produce renewable energy and eco-friendly products, it supports both economic growth and environmental stewardship.
If you’re running a business in these sectors or planning to start one, leveraging Section 80JJA can be a strategic move towards a profitable and sustainable future.
For, more information on this you are requested to contact our KIP subsidy helpline on Mail – sales@kipfinancial.com and contact Number- +918683898080
KIP Financial Consultancy Pvt. Ltd.
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