Section 141 · Deductions
Section 141 of the Income-tax Act, 2025 — Deduction for Profits from Certain Industrial Undertakings
By CA Rajat Agrawal
Updated 04 Jul 2026
Chapter VIII
📜 What the law says — Section 141, Income-tax Act 2025
141. In respect of any tax year, where—
(a) the gross total income of an assessee, includes any profits and gains
derived from any business referred to in section 80-IB of the Income-
tax Act, 1961 (43 of 1961); and
(b) such assessee is eligible to claim a deduction from the profits and gains
derived from such business for such tax year under the provisions of the
said section, as if the said Act had not been repealed,
there shall be allowed, in computing the total income of the assessee, a deduction
from the profits and gains derived from such business, subject to the conditions that—
12. Substituted for “one” by the Finance Act, 2026, w.e.f. 1-4-2026.
(i) the amount of deduction is calculated as per the provisions of section
80-IB of the Income-tax Act, 1961 (43 of 1961); and
(ii) the deduction under this Act shall be allowed only for such tax years,
as would have been allowed under section 80-IB of the Income-tax Act,
1961 (43 of 1961), as if the said Act had not been repealed.
Deductions in respect of profits and gains from housing projects.
In plain language
What Section 141 actually does
Section 141 of the Income-tax Act, 2025 is a grandfathering (legacy) provision. It does not create a brand-new tax break for factories or industrial units. Instead, it protects a deduction that already existed under Section 80-IB of the old Income-tax Act, 1961 — the well-known "deduction in respect of profits and gains from certain industrial undertakings other than infrastructure development undertakings".
When Parliament repealed the 1961 Act and brought in the 2025 Act (effective 1 April 2026), a large number of businesses were still in the middle of their multi-year 80-IB deduction window. Section 141 makes sure those businesses do not lose the balance of their benefit merely because the law changed. In plain words: if you were validly claiming Section 80-IB, you keep claiming it — same percentage, same number of years, same conditions — as if the 1961 Act had never been repealed.
Who it applies to
- Only "legacy" claimants. The assessee must already have had an undertaking that qualified under Section 80-IB before the 1961 Act was repealed. You cannot start a fresh 80-IB claim under Section 141.
- Industrial undertakings and specified businesses covered by 80-IB — for example small-scale/industrial units, units in industrially backward states and districts, cold-chain and food-processing units, hotels and multiplexes, convention centres, hospitals in specified areas, mineral oil and natural gas production, and eligible housing projects.
- Both companies and non-corporate assessees (firms, individuals, co-operative societies) that were eligible under the relevant 80-IB sub-section.
Key conditions and limits
- Gross total income must include the eligible profits. The deduction is only from profits "derived from" the eligible business — not from unrelated income like interest, capital gains or other-source income.
- Quantum is frozen at the old law. The amount is calculated exactly as per Section 80-IB of the 1961 Act — typically 100% of eligible profits for the first block of years, then a reduced percentage (30% for companies, 25% for others) for the remaining years, depending on the category and location.
- Duration is frozen too. The deduction runs only for the tax years that would still have been available under 80-IB — usually a 5, 7 or 10 consecutive assessment-year block that started when the undertaking began operations. No extension, no enlargement, no fresh block.
- All original 80-IB conditions must continue to be satisfied — commencement dates ("sunset" dates), plant-and-machinery limits, employment thresholds, plot-size and completion norms for housing, minimum beds for hospitals, and so on.
- Audit and reporting continue. Where the old law required a chartered accountant's audit report (Form 10CCB for 80-IB), you must continue to file it with the return to substantiate the claim.
How it interacts with other sections
- No double deduction. As under the old regime, profits allowed under Section 141 cannot also be claimed under another profit-linked deduction of the same Chapter for the same amount.
- Total deduction cannot exceed profits of the undertaking, and the combined profit-linked deductions cannot exceed the gross total income.
- It sits alongside the other 2025-Act "legacy deduction" sections that similarly preserve old Chapter VI-A profit-linked benefits (infrastructure, SEZ, housing, etc.).
Practical implications
For most ordinary salaried taxpayers, Section 141 is not relevant — it is a business-and-industry provision. If you run or invest in an eligible undertaking that was already claiming 80-IB, the practical message is simple: keep your documentation, keep meeting the original conditions, keep filing the audit report, and claim the remaining years of your benefit at the same rate. Because the benefit cannot be enhanced or extended, tax planning here is about protecting an existing entitlement, not creating a new one. If your 80-IB block had already expired before 1 April 2026, Section 141 gives you nothing further.
💡 Example
Worked example 1 — company in the middle of its block. Ganesh Cold Storage Pvt. Ltd. set up a qualifying cold-chain undertaking and was allowed a 10-year deduction under Section 80-IB: 100% of profits for the first 5 years and 30% for the next 5 years. Suppose by tax year 2026-27 it is in year 7 of its block, with eligible profits of ₹80 lakh. Under Section 141 it continues exactly as before — deduction = 30% of ₹80 lakh = ₹24 lakh. Only ₹56 lakh of that undertaking's profit is taxed. Nothing about the change in law reduces or resets this.
Worked example 2 — non-corporate assessee, early years. A partnership firm running an eligible food-processing unit is in year 3 of its block, when 80-IB allowed 100% of profits. Eligible profit is ₹40 lakh. Under Section 141 the firm claims ₹40 lakh (100%) as deduction for that year, provided all original conditions (commencement date, activity, audit report) are still met.
A relatable story. Meera's family runs a small manufacturing unit in a notified backward district that had been enjoying an 80-IB deduction. When she heard the old Income-tax Act was being replaced in 2026, she panicked that the benefit would vanish and profits would suddenly become fully taxable. Her CA reassured her: Section 141 of the new Act "carries the benefit across" — same rate, same remaining years — as long as the unit keeps meeting the same conditions and files the same audit report. Meera didn't have to reapply or recalculate; she simply continued claiming the balance of her window.
| Feature | Section 80-IB (Act of 1961) | Section 141 (Act of 2025) |
|---|
| Nature | Original profit-linked deduction | Grandfathering / legacy provision preserving 80-IB |
| New claims allowed? | Yes (until respective sunset dates) | No — only continuation of existing eligible claims |
| Deduction quantum | Typically 100% then 30% (company) / 25% (other), per category | Same — computed exactly as per 80-IB |
| Duration of benefit | 5 / 7 / 10 consecutive assessment years per category | Only the tax years still remaining under 80-IB |
| Common categories | Backward-area units, cold chain, food processing, hotels, multiplex, convention centres, hospitals, mineral oil, housing | Same categories, but only for units already qualified |
| Conditions | Commencement/sunset dates, machinery, employment, audit report | All original conditions must continue to be met |
| Can benefit be enhanced/extended? | N/A | No — cannot be enlarged or extended |
Related sections
Section 80-IB (1961 Act) — Deduction for profits of certain industrial undertakings (the provision Section 141 preserves) Section 80-IA (1961 Act) — Deduction for infrastructure development undertakings Section 80-IC (1961 Act) — Deduction for undertakings in special-category states (North-Eastern & hill states) Section 140 (2025 Act) — Legacy deduction for profits from infrastructure/other undertakings Section 142 (2025 Act) — Continuation of deductions for undertakings in special-category states Form 10CCB — CA audit report required to substantiate industrial-undertaking deductions
Frequently asked questions
Does Section 141 give a new tax deduction to industrial units set up after April 2026?
No. Section 141 only continues an existing Section 80-IB deduction for units that already qualified before the 1961 Act was repealed. It does not create a fresh benefit for new units.
How much deduction can I claim under Section 141?
Exactly what Section 80-IB of the 1961 Act allowed for your category — usually 100% of eligible profits for the initial years and then 30% (companies) or 25% (others) for the balance, subject to the same limits.
For how many years does the benefit last?
Only for the tax years that were still remaining in your original 80-IB block (typically part of a 5, 7 or 10 year window). It cannot be extended beyond that.
My 80-IB deduction block ended before 1 April 2026. Can Section 141 revive it?
No. Section 141 preserves only the unexpired years of an ongoing benefit. If your block had already finished, there is nothing further to carry forward.
Do I need to reapply or get fresh approval to keep claiming?
No fresh approval is needed if you were already compliant, but you must continue to satisfy all original 80-IB conditions and file the required CA audit report (Form 10CCB) with your return.
Is this deduction relevant to a normal salaried taxpayer?
Generally no. Section 141 is a business/industry provision for eligible industrial undertakings and specified businesses, not for salary or ordinary personal income.
Can the deduction be larger than my undertaking's profit or my total income?
No. As under the old law, it cannot exceed the eligible undertaking's profits, and profit-linked deductions together cannot exceed your gross total income.
C
CA Rajat Agrawal
Chartered Accountant, EaseValue · Reviewed 04 Jul 2026
This explainer is prepared and reviewed by EaseValue's tax team, based on the text of the Income-tax Act, 2025 (as amended by the Finance Act, 2026).
Disclaimer: This page explains the law in general terms for education and is not professional advice. The Income-tax Act, 2025 takes effect from 1 April 2026; provisions, thresholds and interpretations may change. Please confirm your specific position with our team before acting.
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