Tax Incentives Available to a Newly Established Units in Special Economic Zone

Abstract

The object of writing this project is to give a clear picture of the position of Section 10AA in the Income Tax Act 1961. This project also aims to give the reader a description of tax assessment in Special Economic Zones. The first chapter in the project deals with the explanation of the concept of SEZ. It talks about the rationale behind providing for such areas and the special privileges awarded to them. A brief example of Chinese concept of SEZ has also been discussed in this chapter. It further talks about the present state and the probable future programmes. The chapter moreover contains a brief critique on the concept. The second chapter deals with the detailed analysis of Section 10AA of Income Tax Act 1961 that deals with SEZ areas. It contains the various provisions contained in the section. It talks about assessees who are eligible for deduction. It gives essential conditions to claim deductions. The chapter also contains the period on which deduction is available, the method of computing deductions for such undertakings, treatment of unabsorbed depreciation, brought forward losses, etc and WDV after tax holiday period. The chapter further discusses provisions regarding deduction allowable in case of amalgamation and demerger. It also contains brief account on SEZ Act 2005 and its features. The third chapter discusses the meaning and provisions regarding deduction allowable in case of amalgamation and demerger. The fourth chapter contains the provisions of the DTC Bill and the impact that it will have on SEZ policy. The last chapter contains the conclusion of the project.