Introduction-
Deduction under section 80JJA in respect of Profit/Gains from Business of Collecting and Processing of Bio-Degradable Waste, means an assessee who engage in the business of collecting and processing or treating of bio-degradable waste for generating power or producing bio-fertilizers, bio-pesticides or other biological agents or for producing bio-gas or making pellets or briquettes for fuel or organic manure etc.
Bio-Degradable Waste-
Bio-Degradable waste is an organic waste like food materials, kitchen wastes and other natural wastes which can get decomposed by certain micro-organisms like bacteria, fungi, and others, under certain temperature and environment into useful gases for fuel and the remains of the process can be used as fertilizers.
Bio-Degradable waste is used for the following purposes-
- Production of bio-fertilizers
- Production of bio-pesticides
- Production of pellets or briquettes
- Production of organic manure
Amount of Deduction-
The deduction is available of an amount equal to the whole of such profits and gains from such business or Rs. 5,00,000 whichever is less.
The deduction is available for a period of five consecutive assessment years beginning with the assessment year relevant to the previous year in which such business commences.
Example-
Mr. X has set up project of Bio-degradable, he earn Rs. 4,50,000 as profit during the year 2017-18. His other income is Rs. 2,30,000. What will be the deduction amount under section 80JJA?
Answer-
Mr. X has income from such business is Rs. 4,50,000, so he is eligible for deduction u/s 80JJA for Rs. 4,50,000 (Whole amount of Profit) or Rs. 5,00,000 whichever is less.
Mr. X has total income as below-
Particulars |
Amount (Rs.) |
Income from Business or Profession |
4,50,000 |
Income from Other Sources |
2,30,000 |
Total Income |
6,80,000 |
Less: Deduction u/s 80JJA |
4,50,000 |
Total Taxable Income |
2,30,000 |
Note- Mr. X can avail deduction up to 5 year starting from 2017-18 on profits from such business or Rs. 5,00,000 whichever is less.