1. Eligible Assesses: Undertaking/Enterprises engaged in development of Special Economic Zone.
2. Conditions:
- The assessee should be a developer of a Special Economic Zone.
- Gross Total Income should include profits and gains derived by such undertaking from any business of developing a Special Economic Zone.
- Special Economic Zone should be notified on or after 1-4-2005
- The books of accounts of the assessee should be audited by a chartered accountant.
- Deduction u/s 80-IAB will be allowed only if the assessee furnishes the return of income before the due date specified u/s 139(1)
3. Amount of deduction: 100% of the profits from the business of developing SEZ. Deduction should not exceed the profits derived from the business of developing SEZ.
4. Period: Deduction is available for 10Consecutive assessment years out of 15 assessment years beginning from the year in which SEZ is notified.
5. Transfer of business: Where the assessee transfers the operation or maintenance to another developer then transferee shall be entitled to deduction for the unexpired period of the total 10 years.
6. Amalgamation:
- Amalgamation should be with another Indian Company
- The Amalgamated Indian company can claim deduction for the period of 10 years
7. Power of AO to recomputed profit: The assessing officer has the power to re-compute the profit of the eligible assessee under the following circumstances-
- where transactions entered into by the eligible undertaking with other business carried on by the assessee does not correspond to the prevailing market rates,
- Where the transactions of the eligible business with other entities / businesses of the assessee or run by persons connected to the assessee are such that more than normal profit arises in the hands of the eligible undertaking and consequently higher deduction is claimed u/s 80-IAB.
8. Not eligible for other deductions: Deductions u/s 80HH to 80RRB will not be available to the assessee, in respect of the profits from the operation and maintenance of SEZ.
