Under the existing provisions of section 80-IB(9) of the Income-tax Act, a seven-year profit-linked deduction of hundred per cent. is available to an undertaking, if it fulfils any of the following, namely:-
(i) is located in North-Eastern Region and has begun or begins commercial production of mineral oil before 15t April, 1997;
(ii) is located in any part of India and has begun or begins commercial production of mineral oil on or after 1st April, 1997;
(iii) is engaged in refining of mineral oil and begins such refining on or after 15t October, 1998 but not later than 31st March, 2012;
(iv) is engaged in commercial production of natural gas in blocks licensed under the VIII Round of bidding for award of exploration contracts (NELP-VIII) under the New Exploration Licencing Policy announced by the Government of India vide Resolution No. 0-19018/22/95-ONG.DO.VL, dated 10th February, 1999 and begins commercial production of natural gas on or after 15t April, 2009;
(v) is engaged in commercial production of natural gas in blocks licensed under the IV Round of bidding for award of exploration contracts for Coal Bed Methane blocks and begins commercial production of natural gas on or after 15t April, 2009.
For the purposes of claiming this deduction, all blocks licensed under a single contract, which has been awarded under the New Exploration Licencing Policy announced by the Government of India vide Resolution No. 0-19018/22/95-ONG.DO.VL, dated 10th February, 1999 or in pursuance of any law for the time being in force or by the Central or a State Government in any other manner, are treated as a single “undertaking”.
Thus, an undertaking, which is located in any part of India and is engaged in commercial production of mineral oil, is eligible for the above-mentioned deduction, if it has begun or begins commercial production of mineral oil at any time after 1st April, 1997. No sunset date has been provided for such business.
It is proposed that the aforesaid deduction available for commercial production of mineral oil will not be available for blocks licensed under a contract awarded after 31st March, 2011 under the New Exploration Licencing Policy announced by the Government of India vide Resolution No. 0-19018/22/95-ONG.DO.VL, dated 10th February, 1999 or in pursuance of any law for the time being in force or by the Central or a State Government in any other manner.
This amendment will take effect from 1st April, 2012 and will, accordingly, apply in relation to the assessment year 2012-13 and subsequent years.
