Page 139 - DCOM508_CORPORATE_TAX_PLANNING

Corporate Tax Planning

Notes

Caselet Nasscom for Tax Exemption under Section 10A or 10B

ew Delhi: As part of its budget recommendations to the government, National
Association of Software and Services Companies (Nasscom) has reiterated its
Ndemand to retain the complete tax exemption under section 10A or 10B to the
industry.
“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 fi nancial
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 fi ve years.
Source: http://www.fi nancialexpress.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
6.2 Special Provision 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).

134 LOVELY PROFESSIONAL UNIVERSITY