Thursday, October 6 2005 16:49 Hrs (IST) - World Time -

New Delhi: In a major relief to exporters, the Government is likely to exempt negative profits from the tax purview by amending the controversial provisions in the Income Tax laws by November.

Tax exemption on negative profits has been supported by the Prime Minister's Economic Advisory Council and subsequently the Department of Revenue has been directed to carry out the necessary amendment, official sources told sources.

The amendment is likely to be carried out by way of issuing an ordinance.

Exporters have been pressing for an amendment to the provisions under section 80HHC of Income Tax Act to enable them to avail tax exemption on a retrospective basis.

Revenue Department has agreed for this and is expected to carry out the amendment from retrospective basis.

Negative profits are calculated by adding export incentives to profit or loss directly derived from exports.

Income Tax authorities had reopened a large number of cases with retrospective effect, denying the deduction benefits to exporters.

Exporters had staged a protest recently against the move by Income Tax authorities after which action was put in abeyance pending EAC decision.