STPI to SEZ

The tax relief or exemption given to units developing Special Economic Zone or units located in a special economic got a severe beating in this budget 2011-12 which has now made units operating in SEZ units Liable to Minimum Alternate Tax , where as the developer or maintaining and running a SEZ units are made to –pay MAT and also tax on distributed income ( Dividend Distribution Tax ).

Effect of Budget on units operation in Special Economic Zones

Under the existing provisions of section 10AA of the Income-tax Act, a deduction of hundred per cent. is allowed in respect of profits and gains derived by a unit located in a Special Economic Zone (SEZ) from the export of articles or things or services for the first five consecutive assessment years; of fifty per cent. for further five assessment years; and thereafter, of fifty per cent. of the ploughed back export profit for the next five years.

Many thanks for quick reply,

I understand MAT would be applicable,

But I wan't to check if an existing company set up an unit in SEZ area and qualify for Income Tax Exemption?

If yes, will it be given 100% deduction for the first 5 years and thereafter 50% for next 5 years so on...

Please advice

Regards

Ramesh

Except Income tax exemption (Since MAT is applicable) all other exemptions continue.

KIND ATTENTION RAMESH JI,

AS PER PARA 6.36.3OF HANDBOOK OF PROCEDURE OF VOL-1 2009-2014, YOU MAY SHIFTED TO SEZ WITH THE APPROVAL OF DEVELOPMENT COMMISSIONER PROVIDED STPI HAS ACHIEVED PRO-RATA OBLIGATION UNDER STPI UNIT.

REGARDS,

FOR MORE INFORMATION CONTACT:-

https://www.stpi.in/index1.php?langid=1&level=0&linkid=141&lid=221

Dear Verma Ji,

Many thanks for quoting the para; I will have a detail lookinto the above reference;

We are ahead of the STPI Obligation so far, so that part is take care off;

But my main query is, can we avail Income Tax Benefit in SEZ as we are not a new company?

If yes, wil there be any condition attached to it?

Regards

Ramesh