INCOME TAX

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

New Delhi, the 18th May, 2010.

Circular No. 4/2010

Subject:- Widening of existing road - definition of a new infrastructure facility - clarification regarding.

References have been received by the Board as to whether widening of existing roads constitutes creation of new infrastructure facility for the purpose of Section 80IA (4)(i) of the Income Tax Act, 1961.

Section 80IA (4)(i) provides for a deduction to an undertaking engaged in developing, or operating and maintaining, or developing, operating and maintaining any infrastructure facility subject to satisfaction of the conditions laid down in the Section. The Explanation to sub-section 80IA (4)(i) states that for the purpose of this clause, infrastructure facility means inter alia:-

"(a) a road including toll road, a bridge or a rail system;

(b) a highway project including housing or other activities being an integral part of the highway project;"

The issue has been examined by the Board. It has been decided that widening of an existing road by constructing additional lanes as a part of a highway project by an undertaking would be regarded as a new infrastructure facility for the purpose of Section 80IA (4)(i). However, simply relaying of an existing road would not be classifiable as a new infrastructure facility for this purpose.

(RAMAN CHOPRA)

Director (ITA-I)

F.No.178/14/2010-ITA.I