Amendment of section 147

Section 47 of the Finance Act, 2026 deals with amendment of section 147. Amendment of section 147. 47. In section 147 of the Income-tax Act,— (a) | for sub-section (2), the following sub-section shall be substituted, namely:— "(2) Irrespective of anything contained in section 80LA of the Income-tax Act, 1961 (43 of 1961), the deduction shall be allowed,— (a) | for an ent

Amendment of section 147.

47. In section 147 of the Income-tax Act,—

(a)		for sub-section (2), the following sub-section shall be substituted, namely:—
		"(2) Irrespective of anything contained in section 80LA of the Income-tax Act, 1961 (43 of 1961), the deduction shall be allowed,—

(a)

for an entity mentioned in sub-section (1)(a),—

(i)		for twenty consecutive tax years beginning from the relevant tax year; and
(ii)		in a case, where the tenth year, out of the period of ten consecutive years of deduction allowed under section 80LA(1) of the said Act has ended on the 31st March, 2025, for further ten consecutive years from the tax year beginning on the 1st April, 2026; and

(b)

in the case of an entity mentioned in sub-section (1)(b), for twenty consecutive tax years out of twenty-five years beginning from the relevant tax year, at the option of an assessee.";

(b)		for sub-section (5), the following sub-sections shall be substituted, namely:—
		'(5) In respect of any Offshore Banking Unit or any other unit referred in sub-section (1), commencing operations on or after the 1st April, 2026, the deduction under sub-section (1) shall be available only if such unit is not formed by splitting up or reconstruction or reorganisation or transfer of a business already in existence in India.
		(6) For the purposes of this section,—

(a)

"relevant tax year" shall be,—

(i)		in case of an entity referred to in sub-section (1)(a), the tax year in which permission under section 23(1)(a) of the Banking Regulation Act, 1949 (10 of 1949), or permission or registration under the Securities and Exchange Board of India Act, 1992 (15 of 1992) or any other relevant law in force was obtained; or
(ii)		in case of an entity referred to in sub-section (1)(b), the tax year in which permission under section 23(1)(a) of the Banking Regulation Act, 1949 (10 of 1949), or permission or registration under the Securities and Exchange Board of India Act, 1992 (15 of 1992), or permission or registration under the International Financial Services Centres Authority Act, 2019 (50 of 2019) was obtained;

(b)		"Unit" shall have the same meaning as assigned to it in section 2(zc) of the Special Economic Zones Act, 2005 (28 of 2005);
(c)		"aircraft" and "ship" shall have the meanings respectively assigned to them in Schedule VI (Note 3).'.

Section 47, The Finance Act, 2026 (Act 4 of 2026).