India - Income Tax Act 2010 - Saarc

S. 80HHE I.T. ACT, 1961 1.43834[Deduction in respect of profits from export of computer software, etc. 3580HHE. (1) Where an assessee, being an Indian company or a person (otherthan a company) resident in India, is engaged in the business of,—(i) export out of India of computer software or its transmission fromIndia to a place outside India by any means;(ii) providing technical services outside India in connection with thedevelopment or production of computer software,there shall, in accordance with and subject to the provisions of this section, beallowed, in computing the total income of the assessee, 36 [a deduction to theextent of the profits, referred to in sub-section (1B),] derived by the assessee fromsuch business :37[***]38[Provided that if the assessee, being a company, engaged in the export out ofIndia of computer software, issues a certificate referred to in clause (b) of subsection(4A), that in respect of the amount of the export specified therein, thededuction under this sub-section is to be allowed to a supporting softwaredeveloper, then the amount of deduction in the case of an assessee shall bereduced by such amount which bears to the total profits derived by the assesseefrom the export, the same proportion as the amount of the export turnoverspecified in such certificate bears to the total export turnover of the assessee.39[Explanation.—For the removal of doubts, it is hereby declared that the profitsand gains derived from on site development of computer software (includingservices for development of software) outside India shall be deemed to be theprofits and gains derived from the export of computer software outside India.](1A) Where the assessee, being a supporting software developer, has during theprevious year, developed and sold computer software to an exporting companyin respect of which the said company has issued a certificate under the provisoto sub-section (1), there shall, in accordance with and subject to the provisionsof this section, be allowed in computing the total income of the assessee adeduction of the profits derived by the assessee from the developing and sellingof computer software to the exporting company in respect of which thecertificate has been issued by the said company 40 [to such extent and for suchyears as specified in sub-section (1B)].]40[(1B) For the purposes of sub-sections (1) and (1A), the extent of deduction ofprofits shall be an amount equal to—34. Inserted by the Finance (No. 2) Act, 1991, w.e.f. 1-4-1991.35. See also Circular No. 3/2004, dated 12-2-2004. For details, see Taxmann’s Master Guide toIncome-tax Act.36. Substituted for “a deduction of the profits” by the Finance Act, 2000, w.e.f. 1-4-2001.37. Proviso omitted by the Finance Act, 1995, w.e.f. 1-4-1996. Prior to its omission, the provisowas amended by the Finance Act, 1993, w.e.f. 13-5-1993 and the Finance Act, 1994, w.e.f.13-5-1994.38. Proviso and sub-section (1A) inserted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999.39. Inserted by the Finance Act, 2001, w.e.f. 1-4-2001. See also Circular No. 3/2004, dated12-2-2004. For details, see Taxmann’s Master Guide to Income-tax Act.40. Inserted by the Finance Act, 2000, w.e.f. 1-4-2001.