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Gopika Juneja, Lovely Professional University
Unit 6: Deductions: For Special Conditions
Unit 6: Deductions: For Special Conditions Notes
CONTENTS
Objectives
Introduction
6.1 Key Tax Benefits for SEZs and SEZ Units
6.2 Deduction in Respect of Profits and Gains by an Undertaking or Enterprise Engaged
in Development of SEZ (Section 80-IAB)
6.3 Special Provisions in Respect of Certain Undertakings or Enterprises in Certain
Special Category States (Section 80-IC)
6.4 Tax Holiday in Respect of Profits and Gains from Eligible Business of Certain
Undertakings in North-Eastern States (Section 80-IE)
6.5 Application of the above Special Conditions
6.6 Summary
6.7 Keywords
6.8 Review Questions
6.9 Further Readings
Objectives
After studying this unit, you will be able to:
State the meaning SEZ
Discuss the key tax benefits to be provided to SEZs and SEZ Units
Realise the deduction in respect of profits and gains by an undertaking or enterprise
engaged in development of SEZ
Trace the special provisions in respect of certain undertakings or enterprises in certain
special category States
Elucidate tax holiday in respect of profits and gains from eligible business of certain
undertakings in North-Eastern States
Test Application of the above Special Conditions
Introduction
A Special Economic Zone (SEZ) is a specified, delineated and duty-free geographical region that
has different economic laws from those of the country in which it is situated. In some countries,
such a region is even treated as a deemed foreign territory. Therefore you can say that SEZs are
free trade zones, having completely different set of administrative and taxation laws outside the
purview of customs authorities. Traditionally SEZs are created as open markets within an economy
that is dominated by distortional trade, macro and exchange regulations and other regulatory
governmental controls. SEZs are believed to create conducive environment to promote
investment and exports. Hence, many developing countries are developing SEZs with the
expectation that they will provide the engines of growth for their economies to achieve
industrialization.
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