Sec 10B Exemption

[Guest]

Hi,

Sec 10B exempts the profits of 100% EOU for 10 consecutive years. Now an existing firm puts up a new unit for its export operation and registered the same under EOU with MEPZ. 

Is it necessary to maintain books of accounts seperately for these 2 units under the same firm.

[MOHAN S]

Hi Chithra,

Kindly go through the Rules prescribed u/s 10B. Yes it is certainly necessary to maintain sepearte books for the two export so that the Assessing Officer can ascertain the profit claimed to be exempt u/s 10B is properly arrived at. 

A word of caution: Please advise your client to keep all records in respect of "Exempted Units" properly as ther are lot of litigation and the department (Very unfortunately) treats such units with an eye of suspicion always.

Mohan

AI Summary

Separate Books Required for New Export Unit to Qualify for Tax Exemption Under Section 10B of Income Tax Act A query was raised regarding the necessity of maintaining separate books of accounts for a new export unit established by an existing firm and registered under EOU with MEPZ, in relation to Section 10B of the Income Tax Act, which provides a tax exemption for 100% EOUs for 10 years. The response advised that separate books are indeed necessary to accurately determine the profits eligible for exemption under Section 10B. It also cautioned that proper record-keeping is essential due to potential scrutiny and litigation by tax authorities.