Exemption u/s 80IAB

[Latha Rajan]

For SEZ Developer a) Interest Income ie., Accrued interest received from BG created b)Divedend income on Short term Investmentin Mutual Funds, c) Loss/gain on derivative related to material purchases, d) Miselleneous income like scrap sale would form a part of Income from Authorised Operation and be exempt u/s. 80IAB. Latha

[Mukesh Kumar]

If the income forming part of total income qualified the term "profits and gains derived from such business" you can claim exemption u/s 80IAB as a developers of SEZ. I doubt that dividend income, derivative transactions would qualify the condition of business profit from SEZ operation. However, i agree with the element of sale of wastage or scrap generated out of SEZ development operation will be eligible for exemption.

AI Summary

SEZ developer exemption: only receipts integrally connected to authorised business operations qualify for tax exemption. Whether various receipts of a Special Economic Zone developer qualify for exemption depends on whether they constitute profits and gains derived from such business of authorised operations. Dividend income and derivative transactions are likely to be scrutinised and may not satisfy the requirement of being business profits from SEZ operations, whereas proceeds from sale of waste or scrap generated in the course of SEZ development are more readily characterized as part of authorised operations and treated as exempt.