Chapter VIII - Deductions to be Made in Computing Total Income
Section 141
Section 141: deduction for profits from certain industrial undertakings
Section 141 is another carry-forward provision. Where an assessee's gross total income includes profits and gains from a business referred to in section 80-IB of the repealed Income-tax Act, 1961, and the assessee was eligible for a deduction under that section, Section 141 lets the deduction continue under the 2025 Act - calculated and time-limited exactly as section 80-IB prescribed.
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Need advice on Section 141?
This article is for general information. Refer to the Income-tax Act, 2025 as amended by the Finance Act, 2026 and the Taxation and Other Laws (Amendment) Act, 2026 for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
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derived from such business for such tax year under the provisions of the said section, as if the said Act had not been repealed,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—
(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would have been allowed under section 80-IB of the Income-tax Act, 1961 (43 of 1961), as if the said Act had not been repealed.
Introduction
Section 141 preserves an industrial-undertaking deduction linked to Section 80-IB of the 1961 Act. It depends on an existing eligible business and the amount and years that the old section would still have allowed.
Key takeaways
Continuing Section 80-IB eligibility
This deduction preserves a qualifying industrial undertaking’s remaining entitlement under Section 80-IB of the 1961 Act after transition to the 2025 Act.
Amount and remaining years
The amount and eligible tax years follow the old Section 80-IB rules as if that Act had not been repealed.
What Section 141 does
Where the gross total income of an assessee includes profits and gains derived from a business referred to in section 80-IB of the Income-tax Act, 1961, and the assessee is eligible to claim a deduction from those profits and gains under that section (as if the said Act had not been repealed), a deduction from those profits and gains is allowed in computing total income under the 2025 Act.
How the deduction is worked out
Both the amount and the duration of the deduction are tied entirely to the old, repealed provision:
- The amount of deduction is calculated as per the provisions of section 80-IB of the Income-tax Act, 1961.
- The deduction under the 2025 Act is allowed only for the tax years for which it would have been allowed under section 80-IB of the Income-tax Act, 1961, as if that Act had not been repealed.
Reconstruct the claim history
Use formation and commencement records, previous returns and undertaking accounts to determine whether the historic Section 80-IB conditions and remaining period are met.
Step-by-step flow for applying Section 141
- 1
Does gross total income for the tax year include profits and gains derived from a business referred to in section 80-IB of the Income-tax Act, 1961?
Section 141(a) looks only at profits and gains from the kind of business referred to in section 80-IB of the Income-tax Act, 1961.
- No: Section 141 does not apply.
- Yes: Go to the next step.
- 2
Would the assessee be eligible for the section 80-IB deduction for this tax year, as if the 1961 Act had not been repealed?
Section 141(b) imports the old eligibility test. Section 141 itself sets no fresh conditions, so the historic approvals, commencement facts and claim history must support eligibility.
- Not eligible under the old section: No deduction under this section.
- Eligible: Go to the next step.
- 3
Is this tax year one for which section 80-IB would still have allowed the deduction?
Condition (ii): the deduction is allowed only for the tax years that would have been allowed under section 80-IB. Count the years already claimed; the 2025 Act does not restart or extend the period.
- Period already exhausted: No deduction for this or later tax years.
- Year still within the period: Go to the next step.
- 4
Compute the amount as per section 80-IB and claim it
Condition (i): the amount is calculated as per the provisions of section 80-IB of the 1961 Act, and is deducted from the profits and gains of that business in computing total income.
Practical checklist
Do
- Trace the exact Section 80-IB category and past deduction years for the undertaking.
- Calculate eligible profit and deduction under the incorporated old-law formula.
Avoid
- Do not begin a fresh deduction period merely because the 2025 Act now contains Section 141.
- Do not apply the continuation rule without evidence of old-law eligibility.
Illustrative example
Worked example: an industrial undertaking checking its remaining entitlement
Hypothetical facts (illustration only, not a real taxpayer): A manufacturing company has an undertaking that claimed the section 80-IB deduction under the 1961 Act. It has since added a second, unrelated product line. On the old rules (assumed for illustration), one eligible tax year remains.
Identify the eligible business
Only profits derived from the business referred to in section 80-IB count under clause (a); the new product line's profits are kept separate.
Eligibility as if not repealed
The company traces its formation, commencement records and previous returns to confirm the section 80-IB conditions would still be met for the year (clause (b)).
Amount and the last remaining year
The amount is computed as per section 80-IB (condition (i)), and it is claimed for the one remaining year only (condition (ii)).
Outcome
- The deduction is claimed under Section 141 for the remaining year on the eligible undertaking's profits only.
- From the next year the eligible period is exhausted; Section 141 does not start a new one.
Glossary
- Undertaking
- The specific qualifying business unit whose profits are tested.
- Continuation provision
- A rule preserving deduction only for years and amounts available under the referenced 1961 Act section.
Frequently asked questions
Does Section 141 introduce a new industrial-undertaking deduction?
No. It only carries forward the deduction an eligible industrial undertaking already had under section 80-IB of the Income-tax Act, 1961, for whatever remains of that original eligibility period, calculated the same way section 80-IB prescribed.
Who is eligible under Section 141?
An assessee whose gross total income includes profits and gains from a business referred to in section 80-IB of the Income-tax Act, 1961, and who was eligible to claim the deduction under that section.
Need help applying this provision to your situation?
Talk to our tax team about industrial undertaking deductionsLast updated 9 October 2026