Section 16A: Small enterprise qualified under an approved scheme

16A. Small enterprise qualified under an approved scheme (1) Notwithstanding the other provisions of this Act, but subject to this section, any individual who sets up a new small enterprise on or after 2 June 2015 shall, where the small enterprise – (a) i s registered under the Small and Medium Enterprises Development Authority Act on or after 2 June 2015; and Acts 2016 227 (b) qualifies under a scheme referred to in section 5A of the Small and Medium Enterprises Development Authority Act, b e exempt from income tax in respect of the income derived from a project under the scheme. (2) The period of exemption under subsection (1) shall not exceed 8 succeeding income years from the income year – (a) s tarting on 1 July 2016, for an enterprise required to submit a CPS Statement under section 106; (b) s tarting on 1 July 2015, for an enterprise not required to submit a CPS Statement under section 106; or (c) i n which the individual starts the activities relating to a project under the scheme referred to in section 5A of the Small and Medium Enterprises Development Authority Act. (3) Any unrelieved tax losses shall not be carried forward after the expiry of the period referred to in subsection (2). (d) in section 24 – (i) b y repealing subsection (3) and replacing it by the following subsection – (3) No annual allowance shall be allowed under this section unless the expenditure is incurred exclusively in the production of gross income. (ii) by adding the following new subsections – (7) Notwithstanding any other provision of this Act where a company has invested 60 million rupees or more or at least 20 per cent of the stated capital of a spinning factory, whichever is the higher, during the 228 Acts 2016 years 2003 to 2008, it shall be allowed an investment tax credit by way of deduction from its tax liability as follows – (a) 1 5 per cent of the investment over 4 years; or (b) 10 per cent over 6 years, a s from the year the investment was made, less any investment tax credit it has been allowed in the past in respect of the same investment. (8) Notwithstanding any other provision of this Act, where a company has invested 10 million rupees or more or at least 20 per cent of the stated capital, whichever is the higher, of a weaving, dyeing or knitting of fabrics factory during the years 2003 to 2008, it shall be allowed an investment tax credit by way of deduction from its tax liability as follows – (a) 1 5 per cent of the investment over 4 years; or (b) 10 per cent over 6 years, a s from the year the investment was made, less any investment tax credit it has been allowed in the past in respect of the same investment. (e) in section 27A – (i) in subsection (2), by deleting the words “taken on or after 1 July 2006”; (ii) in subsection (4)(c), by deleting the figure “2” and replacing it by the figure “4”; (f) in section 27C, in subsection (1), by inserting, after the words “net income”, the words “after deducting any amount under sections 27, 27A and 27B”; Acts 2016 229 (g) in section 49B – (i) in subsection (1)(a), by inserting, after the words “income tax”, the words “in respect of income derived from the activities relating to a project under a scheme referred to in section 5A of the Small and Medium Enterprises Development Authority Act”; (ii) b y repealing subsection (4) and replacing it by the following subsection – (4) In this section – “small company” means – (a) a company incorporated under the Companies Act and registered under the Sm ”; Acts 2016 229 (g) in section 49B – (i) in subsection (1)(a), by inserting, after the words “income tax”, the words “in respect of income derived from the activities relating to a project under a scheme referred to in section 5A of the Small and Medium Enterprises Development Authority Act”; (ii) b y repealing subsection (4) and replacing it by the following subsection – (4) In this section – “small company” means – (a) a company incorporated under the Companies Act and registered under the Small and Medium Enterprises Development Authority Act on or after 2 June 2015; (b) a co-operative society set up on or after 2 June 2015 and registered under the Small and Medium Enterprises Development Authority Act. (h) by repealing section 50L and replacing it by the following section –