Deduction availability - telecom company

[subhash gupta]

whether a company providing telecomunication servies is entitle for deduction of income earned from trading activites of equipments required for providing telecommunication services in addition to income earned from telecommunication services under section 80-IA(4)(ii) of Income Tax Act, 1961.

[Surender Gupta]

Under section 80-IA subsection (1) read with sub section (4, deduction is allowed only for eligible business. Further as per sub section (10) AO has power to calculate the profit of eligible business and to exclude the income of ineligible business.

AI Summary

Telecom company can't claim deductions for equipment trading income under Section 80-IA(4)(ii), limited to telecom services only. A query was raised about whether a telecom company can claim deductions under Section 80-IA(4)(ii) of the Income Tax Act, 1961, for income from trading activities of equipment in addition to income from telecommunication services. The response clarified that deductions are permitted only for eligible businesses under Section 80-IA(1) and (4). Additionally, under subsection (10), the Assessing Officer has the authority to determine the profits of eligible businesses and exclude income from ineligible businesses.