Income Tax Act / Section 80-ID

Section 80-ID of Income Tax Act 1961: Deduction for Hotels and Convention Centres

Section 80-ID provided a 100% profit-linked deduction for five consecutive assessment years to qualifying hotels and convention centres that satisfied the location, commencement and other statutory conditions.

Current legal position from 1 April 2026The Income-tax Act, 1961 was repealed when the Income-tax Act, 2025 came into force on 1 April 2026. Section 80-ID does not have a corresponding deduction provision in the 2025 Act. The old provision nevertheless remains relevant for tax years and proceedings preserved by the repeal and savings provisions. This page should therefore be read as a reference to the legacy Section 80-ID regime, not as a fresh incentive for a new hotel or convention centre commencing after the statutory windows stated below.
Deduction100% of eligible business profits
Deduction periodFive consecutive assessment years from the initial assessment year
Main businessesQualifying hotels and convention centres
Old lawSection 80-ID, Chapter VI-A, Income-tax Act, 1961

What did Section 80-ID provide?

Under Section 80-ID(1), where the gross total income of an assessee included profits and gains derived from an eligible business covered by sub-section (2), a deduction equal to 100% of those profits and gains was allowed for five consecutive assessment years beginning with the initial assessment year.

In practical terms: the section was a time-bound incentive. Eligibility depended not merely on carrying on a hotel or convention-centre business, but also on the undertaking satisfying the prescribed location, construction or commencement period and the conditions in the section.

Eligible businesses under Section 80-ID(2)

The section applied to the following categories of undertakings:

Eligible undertakingLocationRelevant statutory period
HotelSpecified areaConstructed and started functioning between 1 April 2007 and 31 July 2010
Business of building, owning and operating a convention centreSpecified areaConvention centre constructed between 1 April 2007 and 31 July 2010
HotelSpecified district having a World Heritage SiteConstructed and started functioning between 1 April 2008 and 31 March 2013

Conditions for claiming the deduction

Section 80-ID(3) made the deduction conditional. The eligible business could not be formed by splitting up or reconstructing an existing business. It also could not be formed by transferring to the new business a building previously used as a hotel or convention centre.

The undertaking was also restricted from being formed by transfer of machinery or plant previously used for any purpose, subject to the rules incorporated through Explanations 1 and 2 to Section 80-IA(3). The assessee was required to furnish the prescribed audit report, duly signed and verified by an accountant within the meaning applicable under Section 288.

No double deduction and application of Section 80-IA rules

Section 80-ID(4) prevented a second deduction under another provision of Chapter VI-A or under Section 10AA in relation to the same profits and gains of the undertaking. Section 80-ID(5) also applied Section 80-IA(5) and Section 80-IA(8) to (11), so far as applicable, to the eligible business.

These linked provisions are important when examining computation of eligible profits, transfers of goods or services between eligible and other businesses, arrangements producing more than ordinary profits and other restrictions relevant to profit-linked deductions.

Definitions under Section 80-ID(6)

Convention centre

A convention centre meant a building of the prescribed area comprising convention halls used for conferences and seminars, with the prescribed size, number, facilities and amenities.

Hotel

For this section, a hotel meant a hotel classified by the Central Government in the two-star, three-star or four-star category.

Initial assessment year

For a hotel, this was the assessment year relevant to the previous year in which the hotel business started functioning. For a convention centre, it was the assessment year relevant to the previous year in which the convention centre started operating on a commercial basis.

Specified area

The specified area meant the National Capital Territory of Delhi and the districts of Faridabad, Gurgaon, Gautam Budh Nagar and Ghaziabad, using the terminology appearing in the statutory provision.

Specified districts having a World Heritage Site

DistrictState as stated in the provision
AgraUttar Pradesh
JalgaonMaharashtra
AurangabadMaharashtra
KancheepuramTamil Nadu
PuriOrissa
BharatpurRajasthan
ChhatarpurMadhya Pradesh
ThanjavurTamil Nadu
BellaryKarnataka
South 24 ParganasWest Bengal
ChamoliUttarakhand
RaisenMadhya Pradesh
GayaBihar
BhopalMadhya Pradesh
PanchmahalGujarat
KamrupAssam
GoalparaAssam
NagaonAssam
North GoaGoa
South GoaGoa
DarjeelingWest Bengal
NilgiriTamil Nadu

Section 80-ID after the Income-tax Act, 2025

The Income-tax Act, 2025 came into force on 1 April 2026. It repealed the Income-tax Act, 1961, but the transition rules preserve the operation of the earlier law for tax years beginning before that date and for related proceedings. Section 80-ID itself was not carried forward as a corresponding deduction provision in the new Act.

The new Act can still refer to the old Section 80-ID for limited purposes. For example, Section 205 of the Income-tax Act, 2025 refers to buildings previously used as hotels or convention centres where a Section 80-ID deduction under the 1961 Act had been claimed and allowed, and it adopts the old Section 80-ID definitions of "hotel" and "convention centre" for that Part.

Important: A claim relating to an earlier year should be examined under the law applicable to that year, together with the repeal and savings provisions and any relevant transition guidance. The historical commencement windows under Section 80-ID have already expired.

Related Income Tax provisions

For connected profit-linked deductions, see Section 80-IA, Section 80-IAB, Section 80-IAC, Section 80-IB, Section 80-IBA and Section 80-IC.

This article is a general statutory reference. For an actual claim or pending proceeding, verify the provision applicable to the relevant tax year and the facts of the undertaking.