Section 80HHF: Deduction for Export of Film, Television and Music Software

What was Section 80HHF?

Section 80HHF was a Chapter VI-A, Part C deduction for an Indian company or a person other than a company resident in India engaged in exporting or transferring, by any means, qualifying audiovisual software or rights from India to a place outside India. Its scope covered film software, television software, music software, television news software and telecast rights.

The section was a profit-based export deduction, not a deduction equal to all foreign-exchange earnings or gross sales. An eligible taxpayer had to satisfy the statutory realisation, computation, certification and other conditions for the relevant historical assessment year.

Historical Section 80HHF deduction rates

Section 80HHF(1A) provided a phased reduction in the percentage of eligible profits deductible:

Earlier years were governed by the provisions then applicable. These percentages apply to statutory eligible profits, not to total turnover or export receipts.

Eligibility and export conditions

• Eligible assessee: An Indian company or a resident person other than a company carrying on the specified export or transfer business.
• Eligible subject matter: Film software, television software, music software, television news software and telecast rights as defined in the section.
• Export or transfer: The software or software rights had to be exported or transferred outside India by any means.
• Convertible foreign exchange: Under Section 80HHF(2), the consideration had to be received in or brought into India in convertible foreign exchange within six months from the end of the previous year, or a further period allowed by the competent authority.
• Lawful business: Under Section 80HHF(6), the deduction was unavailable where the business involving the specified software or rights was prohibited by law.

The competent authority meant the Reserve Bank of India or another authority authorised by law to regulate foreign-exchange payments and dealings.

How were eligible export profits calculated?

Section 80HHF(3) used a turnover-based formula for determining profits attributable to the eligible export business:

Profits of the business started with profits computed under the head "Profits and gains of business or profession", reduced by the statutory exclusions, including 90% of specified brokerage, commission, interest, rent, charges and similar receipts, as well as profits of overseas branches, offices, warehouses or other establishments.

Export turnover meant qualifying consideration for the specified software or rights received in or brought into India in convertible foreign exchange. It excluded freight, telecommunications charges and insurance attributable to delivery outside India and relevant foreign-currency expenses incurred on technical services outside India.

Total turnover likewise excluded the specified sums under Section 28(iiia), (iiib) and (iiic), freight, telecommunications charges and insurance relating to overseas delivery, and specified foreign-exchange expenditure on technical services abroad.

Illustration of the formula

If statutory business profits were Rs. 10 lakh, eligible export turnover Rs. 60 lakh and relevant total turnover Rs. 100 lakh, the formula would yield Rs. 6 lakh of export profits before applying the historical deduction percentage and any other applicable adjustments. At the 30% rate for assessment year 2004-05, the illustrative deduction would be Rs. 1.8 lakh.

The illustration is simplified. Actual historical computation depends on the applicable statutory definitions and supporting records.

Audit report, foreign exchange and double-deduction restrictions

Accountant's report - Section 80HHF(4)

A claim required an accountant's report in the prescribed form, furnished with the return of income under the historical filing requirements, certifying that the deduction had been correctly claimed. Taxpayers reviewing an old claim should verify the prescribed form and filing rules for the specific year.

No duplicate deduction - Section 80HHF(5)

Where profits were deducted under Section 80HHF for an assessment year, those same profits could not also qualify for a deduction under another provision of the Act for that or another assessment year.

Relevant supporting documents

• Export or transfer agreements, licensing agreements and invoices.
• Evidence identifying the software or telecast rights exported or transferred.
• Foreign-exchange receipt certificates, bank statements and any competent-authority extension.
• Turnover reconciliations, business profit workings and statutory exclusions.
• The prescribed accountant's report and income-tax return records.

Important statutory definitions

Film software - Explanation (d)

A copy of a cinematograph film made through an analogous cinematographic process on acetate polyester or celluloid film positive, magnetic tape, digital media or other optical or magnetic devices, certified by the film certification authority under the Cinematograph Act, 1952 as referred to in the historical provision.

Music software - Explanation (e)

Sounds or music recorded on magnetic tape, cassette, compact disc or digital media, capable of being played or reproduced on appropriate equipment.

Telecast rights - Explanation (g)

A licence or contract to exhibit motion pictures or television programmes over a television network by terrestrial transmission or satellite broadcast in a specified territory.

Television news software - Explanation (h)

Sounds, images, reportage, data and voice relating to actualities, broadcast live or pre-recorded through terrestrial transmission, wire or satellite, including video cassette or digital media recordings.

Television software - Explanation (i)

A programme or series of sounds and images recorded on film, tape or digital media, or broadcast through a terrestrial transmitter, satellite or another means of diffusion.

Convertible foreign exchange - Explanation (b)

The term was linked to the meaning in the Explanation to Section 80HHC and the relevant foreign-exchange framework. The applicable historical rules and Reserve Bank of India permissions must be checked for the year of the claim.

Does Section 80HHF apply in 2026?

No. Section 80HHF's deduction was unavailable from assessment year 2005-06. Exporters of films, television programmes, music, news content or broadcasting rights cannot rely on this old provision for present-day income.

The Income-tax Act, 2025 came into effect on 1 April 2026. The discussion above describes the historical Income-tax Act, 1961 provision, and its legacy section number should not be assumed to identify a current deduction.

Official legislation and guidance

Consult the Income Tax Department for historical statutory provisions and tax information, the India Code database for legislation, the Income Tax e-Filing portal for filing information, and the Reserve Bank of India for foreign-exchange regulation.

Frequently asked questions