The following section 80–IC shall be incerted after section 80–IB by the Finance Act, 2003,
w.e.f. 01.04.2004 : 40. After section 80–IB of the Income–tax Act, the following section shall be inserted with effect
from the 1st day of April, 2004, namely :– ’80–IC. Special provisions in respect of certain undertakings or enterprises in certain special category
States.– (1) Where the gross total income of an assessee includes any profits and gains derived by an
undertaking or an enterprise from any business referred to in sub–section (2), there shall, in
accordance with and subject to the provisions of this section, be allowed, in computing the total
income of the assessee, a deduction from such profits and gains, as specified in sub–section (3). (2) This section applies to any undertaking or enterprise,– (a) which has begun or begins to manufacture or produce any article or thing, not being any
article or thing specified in the Thirteenth Schedule, or which manufactures or produces any
article or thing, not being any article or thing specified in the Thirteenth Schedule and undertakes
substantial expansion during the period beginning– (i) on the 23rd day of December, 2002 and ending before the 1st day of April, 2012, in any
Export Processing Zone or Integrated Infrastructure Development Centre or Industrial Growth
Centre or Industrial Estate or Industrial Park or Software Technology Park or Industrial Area or
Theme Park, as notified by the Board in accordance with the scheme framed and notified by the
Central Government in this regard, in the State of Sikkim; or (ii) on the 7th day of January, 2003 and ending before the 1st day of April, 2012, in any Export
Processing Zone or Integrated Infrastructure Development Centre or Industrial Growth Centre or
Industrial Estate or Industrial Park or Software Technology Park or Industrial Area or Theme
Park, as notified by the Board in accordance with the scheme framed and notified by the Central
Government in this regard, in the State of Himachal Pradesh or the State of Uttaranchal; or (iii) on the 24th day of December, 1997 and ending before the 1st day of April, 2007, in any
Export Processing Zone or Integrated Infrastructure Development Centre or Industrial Growth
Centre or Industrial Estate or Industrial Park or Software Techno–logy Park or Industrial Area or
Theme Park, as notified by the Board in accordance with the scheme framed and notified by the
Central Government in this regard, in any of the North–Eastern States; (b) which has begun or begins to manufacture or produce any article or thing, specified in the
Fourteenth Schedule or commences any operation specified in that Schedule, or which
manufactures or produces any article or thing, specified in the Fourteenth Schedule or
commences any operation specified in that Schedule and undertakes substantial expansion during
the period beginning–

(i) on the 23rd day of December, 2002 and ending before the 1st day of April, 2012, in the State
of Sikkim; or (ii) on the 7th day of January, 2003 and ending before the 1st day of April, 2012, in the State of
Himachal Pradesh or the State of Uttaranchal; or (iii) on the 24th day of December, 1997 and ending before the 1st day of April, 2007, in any of
the North–Eastern States. (3) The deduction referred to in sub–section (1) shall be– (i) in the case of any undertaking or enterprise referred to in sub–clauses (i) and (iii) of clause (a)
or sub–clauses (i) and (iii) of clause (b), of sub–section (2), one hundred per cent of such profits
and gains for ten assessment years commencing with the initial assessment year; (ii) in the case of any undertaking or enterprise referred to in sub–clause (ii) of clause (a) or sub–
clause (ii) of clause (b), of sub–section (2), one hundred per cent of such profits and gains for five
assessment years commencing with the initial assessment year and thereafter, twenty–five per
cent (or thirty per cent where the assessee is a company) of the profits and gains. (4) This section applies to any undertaking or enterprise which fulfils all the following
conditions, namely:– (i) it is not formed by splitting up, or the reconstruction, of a business already in existence : Provided that 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, in the circumstances and within the period
specified in that section; (ii) it is not formed by the transfer to a new business of machinery or plant previously used for
any purpose.
Explanation.–The provisions of Explanations 1 and 2 to sub–section (3) of section 80–IA shall
apply for the purposes of clause (ii) of this sub–section as they apply for the purposes of clause
(ii) of that sub–section. (5) Notwithstanding anything contained in any other provision of this Act, in computing the total
income of the assessee, no deduction shall be allowed under any other section contained in
Chapter VIA or in section 10A or section 10B, in relation to the profits and gains of the
undertaking or enterprise. (6) Notwithstanding anything contained in this Act, no deduction shall be allowed to any
undertaking or enterprise under this section, where the total period of deduction inclusive of the
period of deduction under this section, or under the second proviso to sub–section (4) of section
80–IB or under section 10C, as the case may be, exceeds ten assessment years.

(7) The provisions contained in sub–section (5) and sub–sections (7) to (12) of section 80–IA
shall, so far as may be, apply to the eligible undertaking or enterprise under this section. (8) For the purposes of this section,– (i) “Industrial Area” means such areas, which the Board, may, by notification in the Official
Gazette, specify in accordance with the scheme framed and notified by the Central Government; (ii) “Industrial Estate” means such estates, which the Board, may, by notification in the Official
Gazette, specify in accordance with the scheme framed and notified by the Central Government; (iii) “Industrial Growth Centre” means such centres, which the Board, may, by notification in the
Official Gazette, specify in accordance with the scheme framed and notified by the Central
Government; (iv) “Industrial Park” means such parks, which the Board, may, by notification in the Official
Gazette, specify in accordance with the scheme framed and notified by the Central Government; (v) “Initial assessment year” means the assessment year relevant to the previous year in which
the undertaking or the enterprise begins to manufacture or produce articles or things, or
commences operation or completes substantial expansion; (vi) “Integrated Infrastructure Development Centre” means such centres, which the Board, may,
by notification in the Official Gazette, specify in accordance with the scheme framed and
notified by the Central Government; (vii) “North–Eastern States” means the States of Arunachal Pradesh, Assam, Manipur,
Meghalaya, Mizoram, Nagaland and Tripura; (viii) “Software Technology Park” means any park set up in accordance with the Software
Technology Park Scheme notified by the Government of India in the Ministry of Commerce and
Industry; (ix) “substantial expansion” means increase in the investment in the plant and machinery by at
least fifty per cent of the book value of plant and machinery (before taking depreciation in any
year), as on the first day of the previous year in which the substantial expansion is undertaken; (x) “Theme Park” means such parks, which the Board, may, by notification in the Official
Gazette, specify in accordance with the scheme framed and notified by the Central Government.’.