D. TAX INCENTIVES

Deduction in respect of income of Farm Producer Companies

Section 80P provides for 100 percent deduction in respect of profit of cooperative society which provide assistance to its members engaged in primary agricultural activities.

It is proposed to extend similar benefit to Farm Producer Companies (FPC), having a total turnover upto ₹ 100 Crore, whose gross total income includes any income from-

(i) the marketing of agricultural produce grown by its members, or

(ii) the purchase of agricultural implements, seeds, livestock or other articles intended for agriculture for the purpose of supplying them to its members, or

(iii) the processing of the agricultural produce of its members

The benefit shall be available for a period of five years from the financial year 2018-19.

This amendment will take effect from 1st April, 2019 and will, accordingly, apply in relation to the assessment year 2019-20 and subsequent assessment years.

[Clause 28]

Tax deduction for Farm Producer Companies extended to qualifying entities with specified turnover for a limited term. The provision extends the deduction under Section 80P to Farm Producer Companies whose gross total income includes income from marketing members' agricultural produce, supplying agricultural implements/seeds/livestock to members, or processing members' produce. The deduction is available to FPCs subject to a turnover cap and is granted for a specified limited five-year period beginning in the financial year 2018-19, with effect from the fiscal year starting 1 April 2019 for subsequent assessment years.