Section 147 — IFSC OBU 80LA | ITA 2025

Section 147 — IFSC / OFFSHORE BANKING UNIT DEDUCTION (1961 s. 80LA SUCCESSOR)

Section 147 is the substantive equivalent of 1961 s. 80LA. 100% deduction of specified income for: (a) Offshore Banking Units (OBUs) of scheduled banks operating in SEZ; (b) IFSC (International Financial Services Centre) units in GIFT-City; (c) Specified-financial-services in IFSC. Deduction available for 10 consecutive AYs out of 15 (assessee's choice). Available in BOTH OLD AND NEW REGIMES.

Statutory text — Income-tax Act, 2025

Marginal note — Deduction in respect of certain incomes of Offshore Banking Units and International Financial Services Centre

(1) Where the following assessee has any income of the nature referred to i n sub-section (3), there shall be allowed a deduction equal to 100% of such income:—

(a) a scheduled bank, or a bank incorporated under the laws of a country outside India, and having an Offshore Banking Unit in a Special Economic Zone; or

(b) a unit of an International Financial Services Centre. 13[(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

Corresponding provision — 1961 regime

INCOME-TAX ACT, 2025	INCOME-TAX ACT, 1961
INCOME-TAX ACT, 2025 — s. 147	INCOME-TAX ACT, 1961 — s. 80LA
OBU / IFSC 100% deduction × 10 of 15 AYs	Same
GIFT-City IFSC carve-outs	1961 s. 80LA(1)(d) (FA 2020 onwards)
IFSCA-regulated units	Same

PLANNING NOTES

(i) For GIFT-City IFSC units (banking / insurance / asset management / aircraft leasing / fund-management), s. 147 is a major incentive. (ii) IFSCA registration mandatory; verify category-of-license. (iii) MAT 9% applies to IFSC units (vs. 15% general) — favourable. (iv) For aircraft leasing IFSC entities, additional s. 13(13) / 187 carve-outs may apply. (v) FA 2024 expanded eligible IFSC categories — verify applicability.

CROSS-REFERENCES

Section 13(13) — IFSC dividend exemption.
Section 200 — IFSC concessional rates / MAT.
IFSC Authority Act, 2019.

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