<h1>Draft Direct Taxes Code Proposes Investment-Linked Deductions for SEZs, Replacing Profit-Linked Incentives to Boost Capital Investment.</h1> The draft Direct Taxes Code (DTC) proposes replacing profit-linked incentives with investment-linked deductions for SEZ developers, aiming to enhance efficiency and encourage capital investment. Profit-linked incentives, deemed inefficient, often lead to profit laundering and revenue loss. The DTC suggests maintaining profit-linked deductions for SEZs notified before its commencement, while introducing investment-linked deductions for those notified after. It also proposes levying Minimum Alternate Tax (MAT) and Dividend Distribution Tax (DDT) on SEZ developers and units, with no tax benefits for units set up post-DTC commencement. A Revised Discussion Paper addresses stakeholder concerns, protecting deductions for SEZ units operational before March 31, 2011.