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Deduction under section 80JJA for Profit and Gains from Business of Collecting and Processing of Bio-Degradable Waste


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-
  • Generation of Power
  • Production of bio-fertilizers
  • Production of bio-pesticides
  • Production of bio-gas
  • 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.


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?


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.


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