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CS Executive · Tax Laws and Practice · Deductions

Under section 147(2)(b) of the Income-tax Act, 2025 as substituted w.e.f. 1-4-2026, for how long can an IFSC unit claim the deduction, at the assessee's option?

An IFSC unit may claim the deduction for twenty consecutive tax years out of twenty-five years beginning from the relevant tax year, at the assessee's option. This is the position under section 147(2)(b) as substituted with effect from 1 April 2026; the earlier ten out of fifteen years no longer applies.

  1. ATen consecutive tax years out of fifteen years
  2. BTwenty consecutive tax years out of twenty-five yearsCorrect
  3. CTwenty consecutive tax years without any option
  4. DTen consecutive tax years out of twenty years

Explanation

The substituted section 147(2)(b) allows the deduction for twenty consecutive tax years out of twenty-five years beginning from the relevant tax year, at the assessee's option. The earlier text of ten out of fifteen years is the pre-amendment position, so it is wrong now.

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