Eligible Assessee:
The followings are the eligible Assesee for deduction under Section 36(1)(viii)
- A Finance Corporation specified in section 4A of the Companies Act, 1956
- A Finance Corporation which is a public sector company
- A banking company
- A co-operative bank other than a primary agricultural credit society or a primary cooperative agricultural and rural development bank
- A Housing Finance Company
- Any other financial corporation including a public company
Amount of Deduction:
A financial corporation, banking company, co-operative bank and a housing finance company can claim deduction under section 36(1)(viii) as follows, if a few conditions are satisfied —
Lower of the below allowed as deduction under section 36(1)(viii)
- The amount transferred during the previous year to the special reserve account created for the purpose of section 36(1)(viii); or
- 20 % of the profits derived from the business of providing long-term finance before claiming deduction under section 36(1)(viii); or
- 200 % of (paid-up share capital and general reserve as on the last day of the previous year) minus the balance of the special reserve account on the first day of the previous year
Eligible Business Means:
The business of providing long term finance for
- Industrial or agricultural development or
- Development of infrastructure facility in India or
- Development of housing in India
- The business of providing long-term finance for the construction or purchase of houses in India for residential purpose
