TaxTMI 
TaxTMI 
EXEMPT OR Taxable interst received from FDR by unit covered U/S 10AA of IT Act. Which is kept as margin againt loan taken from bank and utilised for industrial undertaking.
TREATMENT OF INTEREST RECEIVED BY INDUSTRIAL UNIT OF SEZ U/S10AA
28 Oct 2010 
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Tax treatment of interest: classification of interest on margin FDRs affects exemption for SEZ unit income.
Whether interest on fixed deposits created as margin for bank facilities by an SEZ industrial unit falls within the exemption under section 10AA or constitutes taxable income from other sources; key factual issue is the direct nexus between the FDRs (used to secure advance gold loans and LC for procurement) and the unit's manufacturing and export operations, and whether that nexus renders the interest attributable to the industrial undertaking. (AI Summary)
Whether interest on fixed deposits created as margin for bank facilities by an SEZ industrial unit falls within the exemption under section 10AA or constitutes taxable income from other sources; key factual issue is the direct nexus between the FDRs (used to secure advance gold loans and LC for procurement) and the unit's manufacturing and export operations, and whether that nexus renders the interest attributable to the industrial undertaking. (AI Summary)