Tax Incentives for Bio-Degradable Waste Management in India : Clause 145 of the Income Tax Bill, 2025 Vs. Section 80JJA of the Income-tax Act, 1961

Tax deduction for bio-degradable waste businesses allows full profit exemption for a fixed multi-year period.

Clause 145 provides a deduction for businesses whose profits and gains arise from collecting, processing or treating bio-degradable waste for activities including generating power, producing bio-fertilizers, bio-pesticides or biological agents, producing bio-gas, and making pellets or briquettes for fuel or organic manure. The deduction equals the whole amount of profits and gains from the eligible business and is available for five consecutive tax years beginning with the tax year in which the business commences. Key compliance issues include defining commencement, segregating eligible profits, and clarifying interaction with other incentives.