Section 80HHE Deduction in respect of profits from export of computer software, etc.

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The Tax Publishers [1][80HHE.[2] Deduction in respect of profits from export of computer software, etc. (1) Where an assessee, being an Indian company or a person (other than a company) resident in India, is engaged in the business of, -- (i) export out of India of computer software or its transmission from India to a place outside India by any means; (ii) providing technical services outside India in connection with the development or production of computer software, thereshall,inaccordancewithandsubjecttotheprovisions of this section, be allowed, in computing the total income of the assessee, [3][a deduction to the extent of the profits, referred to in sub-section (1B)], derived by the assessee from such business. [4][Provided that if the assessee, being a company engaged in the export out of India of computer software issues a certificate referred to in clause (b) of sub-section (4A), that in respect of the amount of the export specified therein, the deduction under this sub-section is to be allowed to a supporting software developer, then the amount of deduction in the case of an assessee shall be reduced by such amount which bears to the total profits derived by the assessee from the export, the same proportion as the amount of the export turnover specified in such certificate bears to the total export turnover of the assessee. [5][Explanation : For the removal of doubts, it is hereby declared that the profits and gains derived from on site development of computer software (including services for development of software) outside India shall be deemed to be the profits and gains derived from the export of computer software outside India.] (1A) Where the assessee, being a supporting software developer, has during the previous year, developed and sold computer software to an exporting company in respect of which the said company has issued a certificate under the proviso to sub-section (1) there shall, in accordance with and subject to the provisions of this section, be allowed in computing the total income of the assessee a deduction of the profits derived by the assessee from the developing and selling of computer software to the exporting company in respect of which the certificate has been issued by the said company [6][to such extent and for such years as specified in sub-section (1B).] SUBSCRIBE FOR FULL CONTENT

The Tax Publishers

[1][80HHE.[2] Deduction in respect of profits from export of computer software, etc.

(1) Where an assessee, being an Indian company or a person (other than a company) resident in India, is engaged in the business of, --

(i) export out of India of computer software or its transmission from India to a place outside India by any means;

(ii) providing technical services outside India in connection with the development or production of computer software,

thereshall,inaccordancewithandsubjecttotheprovisions of this section, be allowed, in computing the total income of the assessee, [3][a deduction to the extent of the profits, referred to in sub-section (1B)], derived by the assessee from such business.

[4][Provided that if the assessee, being a company engaged in the export out of India of computer software issues a certificate referred to in clause (b) of sub-section (4A), that in respect of the amount of the export specified therein, the deduction under this sub-section is to be allowed to a supporting software developer, then the amount of deduction in the case of an assessee shall be reduced by such amount which bears to the total profits derived by the assessee from the export, the same proportion as the amount of the export turnover specified in such certificate bears to the total export turnover of the assessee.

[5][Explanation : For the removal of doubts, it is hereby declared that the profits and gains derived from on site development of computer software (including services for development of software) outside India shall be deemed to be the profits and gains derived from the export of computer software outside India.]

(1A) Where the assessee, being a supporting software developer, has during the previous year, developed and sold computer software to an exporting company in respect of which the said company has issued a certificate under the proviso to sub-section (1) there shall, in accordance with and subject to the provisions of this section, be allowed in computing the total income of the assessee a deduction of the profits derived by the assessee from the developing and selling of computer software to the exporting company in respect of which the certificate has been issued by the said company [6][to such extent and for such years as specified in sub-section (1B).]