1. Tax-Free Business (Section 80JJA of Income Tax Act, 1961)

If you’re looking for a low investment, high-demand, tax-free business that is also eligible for government subsidies, then Biomass Briquettes and Pellets is a perfect choice.

To encourage eco-friendly businesses, the Government of India offers a 100% tax deduction under Section 80JJA for businesses that process biodegradable waste and generate eco-products.

Eligible Activities under Section 80JJA:

• Collection and Processing of Biodegradable Waste for Power Generation

• Production of Bio-fertilizers and Bio-pesticides

• Generation of Biogas or Compressed Bio Gas (CBG)

• Manufacturing of Pellets or Briquettes from Agri Waste

• Production of Organic Manure

Duration of Tax Deduction:

100% tax exemption on profits for 5 consecutive assessment years, starting from the year your business begins operations.

Example:
If your business starts in FY 2023-24, you will enjoy tax benefits from AY 2024-25 to AY 2028-29.

2. MNRE – Central Financial Assistance (CFA) Scheme

The Ministry of New and Renewable Energy (MNRE) has launched a special Biomass Programme under its Waste-to-Energy initiative, which will remain effective until March 31, 2026.

Key Highlights:

• Total Budget: ₹128 Crores

• Focus Areas: Production of Biomass Briquettes and Pellets

• Eligibility: New businesses or expansion projects (Proprietorship, Partnership, LLP, Pvt. Ltd., or Public Ltd.)

Subsidy Classification:

Note: This revised subsidy structure is applicable from July 16, 2024.

Raw Material Requirement:

Only Agro-residues are permitted — such as crop residue, forest waste, bamboo dust, wood chips, etc.
Not Allowed: Municipal solid waste, black liquor, press mud, and processed industrial waste.

Application Process:

• Must apply for Initial Project Approval (IPA) to MNRE before starting production.

• Only new machinery (e.g., pellet/briquette machines, boilers, turbines) are eligible for CFA.