Tax credit in respect of tax paid on deemed income relating to certain companies.

1. (1) Where any amount of tax is paid under sub-section (1) of section 115JA by an assessee being a company for any assessment year, then, credit in respect of tax so paid shall be allowed to him in accordance with the provisions of this section. 7[(1A) Where any amount of tax is paid under sub-section (1) of section 115JB by an assessee, being a company for the assessment year commencing on the 1st day of April, 2006 and any subsequent assessment year, then, credit in respect of tax so paid shall be allowed to him in accordance with the provisions of this section.] 1[(2) The tax credit to be allowed under sub-section (1) shall be the difference of the tax paid for any assessment year under sub-section (1) of section 115JA and the amount of tax payable by the assessee on his total income computed in accordance with the other provisions of this Act: Provided that no interest shall be payable on the tax credit allowed under sub-section (1). (2A) The tax credit to be allowed under sub-section (1A) shall be the difference of the tax paid for any assessment year under sub-section (1) of section 115JB and the amount of tax payable by the assessee on his total income computed in accordance with the other provisions of this Act: Provided that no interest shall be payable on the tax credit allowed under sub-section (1A): 2[Provided further that where the amount of tax credit in respect of any income-tax paid in any country or specified territory outside India, under section 90 or section 90A or section 91, allowed against the tax payable under the provisions of sub-section (1) of section 115JB exceeds the amount of such tax credit admissible against the tax payable by the assessee on its income in accordance with the other provisions of this Act, then, while computing the amount of credit under this sub-section, such excess amount shall be ignored.]
2. (3) The amount of tax credit determined under sub-section (2) shall be carried forward and set off in accordance with the provisions of sub-sections (4) and (5) but such carry forward shall not be allowed beyond the fifth assessment year immediately succeeding the assessment year in which tax credit becomes allowable under sub-section (1). (3A) The amount of tax credit determined under sub-section (2A) shall be carried forward and set off in accordance with the provisions of sub-sections (4) and (5) but such carry forward shall not be allowed beyond the 3[fifteenth assessment year] immediately succeeding the assessment year in which tax credit becomes allowable under sub-section (1A).]
3. (4) The tax credit shall be allowed set-off in a year when tax becomes payable on the total income computed in accordance with the provisions of this Act other than section 115JA 4[or section 115JB, as the case may be].
4. (5) Set off in respect of brought forward tax credit shall be allowed for any assessment year to the extent of the difference between the tax on his total income and the tax which would have been payable under the provisions of sub-section (1) of section 115JA 4[or section 115JB, as the case may be] for that assessment year.
5. (6) Where as a result of an order under sub-section (1) or sub-section (3) of section 143, section 144, section 147, section 154, section 155, sub-section (4) of section 245D, section 250, section 254, section 260, section 262, section 263 or section 264, the amount of tax payable under this Act is reduced or increased, as the case may be, the amount of tax credit allowed under this section shall also be increased or reduced accordingly. 5[(7) In case of conversion of a private company or unlisted public company into a limited liability partnership under the Limited Liability Partnership Act, 2008 (6 of 2009), the provisions of this section shall not apply to the successor limited liability partnership. Explanation.—For the purposes of this section, the expressions “private company” and “unlisted public company” shall have the meanings respectively assigned to them in the Limited Liability Partnership Act, 2008 (6 of 2009).]]

¹ Subs. by Act 27 of 1999, s. 90, for “sub-clause (b) or sub-clause (c) of clause (iv) of sub-section (2) of section 80-IA” (w.e.f. 1-4-2000).

² Subs. by s. 90, ibid., for “profits and gains under sub-section (5) of section 80-IA” (w.e.f. 1-4-2000).

³ Subs. by s. 90, ibid., for “under sub-section (12) of section 80-IA, and subject to fulfilling the conditions laid down in sub-section (4A) of section 80-IA” (w.e.f. 1-4-2000).

⁴ Ins. by Act 26 of 1997, s. 37 (w.e.f. 1-4-1997).

⁵ Ins. by s. 37, ibid. (w.e.f. 1-4-1998).

⁶ Ins. by Act 26 of 1997, s. 38 (w.e.f. 1-4-1997).

⁷ Ins. by Act 18 of 2005, s. 35 (w.e.f. 1-4-2006).

¹ Subs. by Act 21 of 2006, s. 23, for sub-sections (2) and (3) (w.e.f. 1-4-2007).

² Ins. by Act 7 of 2017, s. 46 (w.e.f. 1-4-2018).

³ Subs. by, s. 46, ibid., for “tenth assessment year” (w.e.f. 1-4-2018).

⁴ Ins. by Act 10 of 2000, s. 51 (w.e.f. 1-4-2001). 5. Ins. by Act 14 of 2010, s. 29 (w.e.f. 1-4-2011).