tax exemption

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Querist : Anonymous

Querist : Anonymous (Querist)

21 May 2011 whether tax exepmtion is allowed to food processing industry under income tax act if yes under which section and up to what extent.

The link shows that five years exemption to fruits and vegetable processing industry. i need to know abt food grains processing

U S Sharma

U S Sharma (Expert)
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22 May 2011 https://india.gov.in/sectors/commerce/food_processing.php

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Querist : Anonymous

Querist : Anonymous (Querist)

22 May 2011 The link shows that five years exemption to fruits and vegetable processing industry. i need to know abt food grains processing

U S Sharma

U S Sharma (Expert)
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22 May 2011 please post exact nature of your activity to discuss more.

Querist : Anonymous

Querist : Anonymous (Querist)

23 May 2011 Food grain industry i.e. rice mill new set up. purchase paddy, mill it and produce rice

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)
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26 July 2025 Regarding **tax exemption for food processing industry under the Income Tax Act**, here’s the key info tailored to your query:

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### 1. **Is tax exemption available for food processing industry?**

Yes, under certain conditions, **income tax exemptions or incentives are available for food processing units**.

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### 2. **Section applicable for exemption:**

* **Section 80-IB(9)** of the Income Tax Act provides **tax incentives for industrial undertakings engaged in the processing of fruits and vegetables**.
* This section grants **100% deduction of profits for 5 consecutive assessment years** out of 10 years from the commencement of production, applicable to fruits and vegetable processing units.

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### 3. **What about food grains processing?**

* Unfortunately, **Section 80-IB(9) specifically covers only fruits and vegetable processing industries**.
* For **food grains processing units** (like rice mills, wheat mills, etc.), **there is no specific income tax exemption under Section 80-IB(9)**.
* They are treated as regular industrial units for income tax purposes.

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### 4. **Other possible benefits for food grains processing units:**

* **Section 80-IA** may provide exemption for certain infrastructure projects but **not applicable for food grain processing**.
* There may be **state-level incentives** (like subsidies, concessional power rates) depending on your state government policies for agro or food processing industries.
* Some **capital investment subsidy schemes** or **technology upgradation benefits** may be available from central/state governments.
* You may also explore benefits under the **Income Tax Act for new industrial undertakings** (Section 80-IB(1) to 80-IB(8)) but generally, rice mills are not covered.

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### 5. **Summary:**

| Industry | Income Tax Exemption under IT Act |
| ---------------------------------------- | ------------------------------------------------------ |
| Fruits and vegetable processing | Yes, 100% deduction for 5 years under Section 80-IB(9) |
| Food grains processing (e.g., rice mill) | No specific exemption under Income Tax Act |

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### 6. **Recommendation:**

* Check with your **state’s food processing development authority** or **industrial department** for state-specific incentives.
* Also consider GST benefits, subsidies, or other non-income tax incentives available for your sector.

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If you want, I can help you find specific state incentives or other schemes applicable to rice mills and food grains processing industries. Would you like that?

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