Deduction in respect of certain income of Producer Companies
[Section-150 as per the Income Tax Act, 2025 (this Act) w.e.f. 1st April, 2026.]
Section 150(1) of Income Tax Act 2025
150(1) An assessee, who,––
- (a) is a Producer Company;
- (b) has a total turnover of less than one hundred crore rupees in any tax year; and
- (c) has any profits and gains derived from eligible business included in its gross total income,
shall be allowed a deduction of 100% of the profits and gains attributable to such business for the tax year commencing on or after the 1st April, 2018, but before the 1st April, 2024.
Section 150(2) of Income Tax Act 2025
150(2) The deduction under this section shall be allowed after the gross total income of the assessee mentioned in sub-section (1) is reduced by any other deduction under this Chapter to which such assessee is entitled.
Section 150(3) of Income Tax Act 2025
150(3) For the purposes of this section,—
- (a) “eligible business” means—
- (i) the marketing of agricultural produce grown by the members; or
- (ii) the purchase of agricultural implements, seeds, livestock or other articles intended for agriculture for the purpose of supplying them to the members; or
- (iii) the processing of the agricultural produce of the members;
- (b) “Member” shall have the same meaning as assigned to it in section 378A(e) of the Companies Act, 2013;
- (c) “Producer Company” shall have the same meaning as assigned to it in section 378A(1) of the Companies Act, 3013.
FAQs on Section 150 of Income Tax Act 2025
What is Section 150 of the Income Tax Act, 2025 about?
Section 150 provides for a 100% deduction of profits and gains derived from eligible business by certain Producer Companies, subject to conditions.
Who is eligible to claim deduction under Section 150?
Only Producer Companies with a turnover less than ₹100 crore in any tax year and deriving profits from eligible business are eligible.
What is the quantum of deduction available under Section 150?
100% of the profits and gains attributable to eligible business is deductible.
What is the period for which this deduction is available?
The deduction is available for tax years commencing on or after April 1, 2018, but before April 1, 2024.
What are the types of eligible business under Section 150?
Eligible business includes:
(i) marketing of agricultural produce grown by members,
(ii) purchase of agricultural inputs for supply to members, and
(iii) processing of agricultural produce of members.
What is the turnover limit to claim deduction under Section 150?
The Producer Company must have a total turnover of less than ₹100 crore in the relevant tax year.
Can a company claim other deductions along with Section 150 deduction?
Yes, but the deduction under Section 150 is allowed only after reducing the gross total income by any other deductions under the same Chapter.
What is the meaning of “Member” for the purposes of this section?
“Member” refers to the definition given under section 378A(e) of the Companies Act, 2013.
What is the meaning of “Producer Company” under this section?
“Producer Company” is as defined in section 378A(1) of the Companies Act, 2013.
Is the deduction available beyond the tax year ending on March 31, 2024?
No, the deduction is not available for any tax year commencing on or after April 1, 2024.
Can a Producer Company with diversified business activities claim this deduction?
Yes, but only the profits attributable to the eligible business as defined in Section 150(3)(a) are deductible.
Is there a cap on the amount of deduction under Section 150?
There is no monetary cap; the entire profits and gains from eligible business are deductible if other conditions are met.
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