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Centre mulls five-year extension of income tax benefits for SEZ units

Friday, 25 Oct 2019
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The Central government is considering five-year extension of tax benefits for units in special economic zones (SEZs) by extending the sunset clause beyond 31 March 2020 to boost investor sentiment. The Centre is also considering removing Minimum Alternate Tax (MAT) on the export turnover of SEZs is also being considered.

According to the sunset clause, the 100 percent income tax exemption on export income for SEZ units under Section 10AA of the Income Tax Act for the first five years, 50 percent for next five years and 50 percent of the ploughed back export profit for subsequent five years, will expire on March 31, 2020.

All SEZs that are operational on or after 1 April 2020 will not be given income tax exemptions which are the biggest drivers for investments. A total of 351 SEZs have been notified so far, of which only 234 SEZs are operational.

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