In India, a tax holiday is available in respect of profits derived from exports by a 100% export oriented undertaking, or an undertaking located in a free trade zone, export processing zone, special economic zone, software technology park, etc. The tax holiday is available in respect of profits derived by non-SEZ units up to Assessment year 2011-12.

In the case of an undertaking located in a SEZ commencing activities on or after 1 April 2003, the tax incentives are available as follows:

First five years – 100% of profits
Next two years – 50%of profits
Last three years – 50% of profits or amount transferred to credit of SEZ Re-Investment Allowance reserve whichever is lesser.

In the case of new units located in a Special Economic Zone commencing activities on or after 1 April 2006, the tax incentives available are as follows:

First five years – 100% of profits
Next five years – 50% of profits or amount transferred to credit of SEZ Re-Investment Allowance reserve whichever is lesser.

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5 Comments on Tax Holiday for SEZ in India

  1. USHA says:

    I WANT TO KNOW WHAT IS SEZ ACTUALY.
    CAN ANYONE GIVE ME ANS OF THIS QUESTION?

    • Suresh says:

      SEZ stands for Special Economic Zone. This is covered under SEZ Act in India, for development of industry and investments. If you google out for SEZ presentation, you will get detailed ppts containing majority of the issues/matters covering SEZ. You can also reach me at vsuri044 @yahoo.com

      • Priyanka says:

        Can anyone clarify for me if in case of “tax holiday” , does tax include professional tax as well???
        Does professional tax apply to SEZ units??

  2. shahnawaz says:

    is tax holiday benifit available only for 10 years?

    • Ajeet Raut says:

      It may change as per the government rule. This tax incentive may change on year basis too. this act is just to promote the export in the country….

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