Amended and updated notes on section 44BBB of Income Tax Act 1961 as amended by the Finance Act 2022 and Income-tax Rules, 1962. Detail discussion on provisions and rules related to special provision for computing profits and gains of foreign companies engaged in the business of civil construction, etc., in certain turnkey power projects.
Chapter IV (Sections 14 to 59) of the Income Tax Act 1961 deals with the provisions related to computation of total income. Section 44BBB of IT Act 1961-2023 provides for special provision for computing profits and gains of foreign companies engaged in the business of civil construction, etc., in certain turnkey power projects.
Recently, we have discussed in detail section 44BBA (special provision for computing profits and gains of the business of operation of aircraft in the case of non-residents) of IT Act 1961. Today, we learn the provisions of section 44BBB of Income-tax Act 1961. The amended provision of section 44BBB is effective for financial year 2022-23 relevant to the assessment year 2023-24.
In this article, you will learn detail of the provisions of section 44BBB of the Income Tax Act, 1961 Bare Act read with the Income-tax Rules, 1962, regulations, notifications, circulars, orders and Press Release by CBDT, Income Tax Department and the Ministry of Law and Justice, Government of India.
Section-44BBB: Special provision for computing profits and gains of foreign companies engaged in the business of civil construction, etc., in certain turnkey power projects
Section 44BBB(1) of Income Tax Act
Notwithstanding anything to the contrary contained in sections 28 to 44AA, in the case of an assessee, being a foreign company, engaged in the business of civil construction or the business of erection of plant or machinery or testing or commissioning thereof, in connection with a turnkey power project approved by the Central Government in this behalf, a sum equal to ten per cent of the amount paid or payable (whether in or out of India) to the said assessee or to any person on his behalf on account of such civil construction, erection, testing or commissioning shall be deemed to be the profits and gains of such business chargeable to tax under the head “Profits and gains of business or profession”.
Section 44BBB(2) of Income Tax Act
Notwithstanding anything contained in sub-section (1), an assessee may claim lower profits and gains than the profits and gains specified in that sub-section, if he keeps and maintains such books of account and other documents as required under sub-section (2) of section 44AA and gets his accounts audited and furnishes a report of such audit as required under section 44AB, and thereupon the Assessing Officer shall proceed to make an assessment of the total income or loss of the assessee under sub-section (3) of section 143 and determine the sum payable by, or refundable to, the assessee.