XY & Co, a Partnership Concern, had established an undertaking for manufacturing of Computer Software in SEZ. It furnishes the following particulars of its 2nd year of operations ended on 31.03.2025: (a) Total Sales

Answer 6A(ii) Section 10AA(1) of the Income Tax Act, 1961: In computing the total income of an assessee, being an entrepreneur as referred to in clause (j) of section 2 of the Special Economic Zones Act, 2005, from his Unit, who begins to manufacture or produce articles or things or provide any services during the previous year relevant to any assessment year commencing on or after the 1st day of April, 2006, but before the first day of April, 2021, the deduction shall be allowed U/s 10AA of the Income tax Act, 1961. The deduction is available for units that begin operations before 01.04.2020, which has been extended to 30.09.2020 through the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. As the XY & Co. (a partnership firm) of its 2 nd year of operation ended on 31.03.2025. Therefore, assessee is not eligible for deduction U/s 10AA of the Income Tax Act, 1961. Computation of Profits and Gains from Business of XY & Co. for AY 2025-26 Particulars Amount in Lakhs Profits as per Profit and Loss Account 10.00 Add: Depreciation as per Books 3.00 Less: Depreciation as per Income Tax Act (2.55) Working: Depreciation at 15% under SLM (Given) Therefore, Original Cost = ₹3 Lakhs ÷ 15% = ₹20.00 Lakhs Less: Depreciation for PY 2023-2024 at 15% (Depreciation for Previous Year is 15%) = ₹3.00 Lakhs WDV as on 01.04.2024 = ₹17.00 Lakhs Less: Depreciation for PY 2024-2025 at 15% (Depreciation for Previous Year is 15%) = ₹2.55 Lakhs Closing WDV as on 31.03.2025 = ₹14.45 Lakhs Taxable Business Income of XY & Co. 10.45