Section 10BA allowed a deduction of the profits and gains derived by an undertaking from the export out of India of “eligible articles or things”, meaning hand-made articles or things of artistic value which require the use of wood as the main raw material. An undertaking that had claimed s. 10A or s. 10B was not entitled to it.
The conditions were that the undertaking manufactured or produced the eligible articles without imported raw materials; was not formed by splitting up or reconstruction of an existing business or by transfer of used machinery or plant; made ninety per cent or more of its sales by way of export of the eligible articles; and employed twenty or more workers in the process of manufacture. Sale proceeds had to be received in convertible foreign exchange within six months from the end of the previous year, or a further allowed period.
Operative consequences
Export profits were the proportion of business profits that export turnover bore to total turnover (sub-section (4)).
An accountant’s report in the prescribed form had to accompany the return (sub-section (5)).
Where the deduction was allowed, no deduction under any other section was allowed for the export profits (sub-section (6)).
Sales in a shop or emporium in India not involving customs clearance were not “export out of India”.
Status
The section is not operative for AY 2026-27. The second proviso to sub-section (1) states that no deduction “shall be allowed to any undertaking for the assessment year beginning on the 1st day of April, 2010 and subsequent years”. The Finance Act, 2026 does not amend this section.
The 1961 Act governs AY 2026-27 and earlier assessment years; the Income-tax Act, 2025 governs tax year 2026-27 onwards. For this subject there is no provision in the Income-tax Act, 2025.
Function in the statutory architecture
Section 10BA allowed a deduction of the profits and gains derived by an undertaking from the export out of India of “eligible articles or things”, meaning hand-made articles or things of artistic value which require the use of wood as the main raw material. An undertaking that had claimed s. 10A or s. 10B was not entitled to it.
The conditions were that the undertaking manufactured or produced the eligible articles without imported raw materials; was not formed by splitting up or reconstruction of an existing business or by transfer of used machinery or plant; made ninety per cent or more of its sales by way of export of the eligible articles; and employed twenty or more workers in the process of manufacture. Sale proceeds had to be received in convertible foreign exchange within six months from the end of the previous year, or a further allowed period.
Operative consequences
Status
The section is not operative for AY 2026-27. The second proviso to sub-section (1) states that no deduction “shall be allowed to any undertaking for the assessment year beginning on the 1st day of April, 2010 and subsequent years”. The Finance Act, 2026 does not amend this section.
The 1961 Act governs AY 2026-27 and earlier assessment years; the Income-tax Act, 2025 governs tax year 2026-27 onwards. For this subject there is no provision in the Income-tax Act, 2025.