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Income Tax Laws – I

Notes
“Government should honour the commitment of full exemption from taxes on export
profits till 2010, since investments and business plans have been made on the basis of this
commitment. We urge the government not to be short-sighted but look at long-term
gains from this sector, which has contributed consistently to the growth of our economy,”
Nasscom president Kiran Karnik said. Nasscom has also suggested that the government
should pursue the totalisation agreement with the US and tax withholding issue with
Japan and other countries to help the Indian IT companies further expand in these markets.
It has recommended tax holiday benefits as well as demergers and amalgamations to be
excluded from the provisions of sections 10A/10B. Under custom-related issues, it has
recommended that all taxable services provided in relation to software and services of
online information, database access and data processing within banking and financial
services, should be exempted from the levy of service tax. Within e-commerce, it has
demanded that a tax moratorium on e-commerce at least for the next five years.
Source: http://www.financialexpress.com/news/nasscom-for-tax-exemption-under-section-10a10b/
71143

Self Assessment

Fill in the blanks:

1. ……………………is an area within which goods may be landed, handled, manufactured or
reconfigured, and re-exported without the intervention of the customs authorities.
2. For the assessment year beginning on the 1st day of April, 2003, the deduction under this
sub-section shall be ………………of the profits and gains derived by an undertaking.
3. ………………deduction under this section shall be allowed to an assessee who does not
furnish a return of his income on or before the due date specified under sub-section (1) of
section 139.
4. ………….means any park set up in accordance with the Electronic Hardware Technology
Park (EHTP) Scheme notified by the Government of India in the Ministry of Commerce
and Industry.

5. ……………..means any park set up in accordance with the Software Technology Park
Scheme notified by the Government of India in the Ministry of Commerce and Industry.

5.2 Special Provisions in Respect of Newly Established Undertaking

in SEZs

Section 10AA was inserted in the Income-tax Act, 1961 by the Special Economic Zones Act, 2005
(the SEZ Act) with effect from 10-2-2006. The section was enacted specially with respect to
provide tax exemption to the newly established units in the Special Economic Zone (SEZ).

5.2.1 Conditions to be Fulfilled

For claiming deduction under section 10AA of the Act following conditions are to be satisfied:
1. The assessee being an entrepreneur as defined under section 2(j) of the SEZ Act has to set
up a unit in the SEZ
2. The unit so set up by the assessee should commence to manufacture or produce articles or
things or provide any service during the previous year commencing after 1-4-2006

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