Deduction for foreign project profits allowed subject to reserve account, convertible foreign exchange remittance, audit and recapture rules.

Section 80HHB allows a deduction for profits from execution of prescribed foreign projects by Indian companies or resident persons when payable in convertible foreign exchange, subject to conditions: separate audited accounts, crediting a portion to a Foreign Projects Reserve Account, remittance into India in convertible exchange within prescribed periods (or Commissioner allowed extension), limitation of deduction where credited/remitted amounts are less than prescribed, and recapture if reserve funds are used within five years for distributions or non business purposes; amounts qualifying here are excluded from other Chapter deductions.

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