Hotel Business Tax - Hotels in World Heritage Site

Contruction of Hotels in specified districts

Hotel Business Tax Deduction u/s 80-ID

Contruction of Hotels is your business dream? If the answer is "Yes", you have to act swiftly to enjoy the tax deduction u/s 80-ID.

Advance-Tax Calculation Hotel Business Tax

Deduction in respect of profits and gains from business of hotels is available for undertaking engaged in the business of hotel located in the specified district having a World Heritage Site.

Here is the list of specified districts eligible to claim Hotel Business Tax Deduction.

Such hotel should be constructed and has to be started or starts functioning at any time during the period beginning on the 1st day of April, 2008 and ending on the 31st day of March, 2013.

As of today (31-August-2012), we have just seven more months to avail this deduction.

How much deduction you can claim?

Deduction of an amount equal to hundred per cent of the profits and gains derived from such business for five consecutive assessment years beginning from the initial assessment year can be claimed.

What is Initial Assessment Year?

In the case of a hotel, Initial Assessment Year means the assessment year relevant to the previous year in which the business of the hotel starts functioning;

Hotel Business Tax Deductions & Conditions

Your hotel business should not be,

  1. formed by the splitting up, or the reconstruction, of a business already in existence;

  2. formed by the transfer to a new business of a building previously used as a hotel or a convention centre;

  3. formed by the transfer to a new business of machinery or plant previously used for any purpose.

In addition, you have to furnish along with the return of income, the report of an audit duly signed and verified by an accountant, certifying that the deduction has been correctly claimed.


Interesting? Let's see the definitions given as per Income Tax Act.

Hotel means a hotel of two-star, three-star or four-star category as classified by the Central Government;

Hotel Business Tax Deductions - Specified Districts

Here is the list of specified districts having a World Heritage Site.

S.No District State
1 Kamrup Assam
2 Goalpara Assam
3 Nagaon Assam
4 Gaya Bihar
5 North Goa Goa
6 South Goa Goa
7 Panchmahal Gujarat
8 Bellary Karnataka
9 Chhatarpur Madhya Pradesh
10 Raisen Madhya Pradesh
11 Bhopal Madhya Pradesh
12 Jalgaon Maharashtra
13 Aurangabad Maharashtra
14 Puri Orissa
15 Bharatpur Rajasthan
16 Kancheepuram Tamil Nadu
17 Thanjavur Tamil Nadu
18 Nilgiri Tamil Nadu
19 Chamoli Uttarakhand
20 Agra Uttar Pradesh
21 South 24 Parganas West Bengal
22 Darjeeling West Bengal

Note: If you claim deduction u/s 80-ID, no deduction shall be allowed under any other section contained in Chapter VIA or section 10AA, in relation to the profits and gains of your undertaking.


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