TaxTMI 
TaxTMI 
Special provision in respect of newly established undertakings in free trade zone, etc.
X X X X Extracts X X X X
X X X X Extracts X X X X
....rs : Provided further that where an undertaking initially located in any free trade zone or export processing zone is subsequently located in a special economic zone by reason of conversion of such free trade zone or export processing zone into a special economic zone, the period of ten consecutive assessment years referred to in this sub-section shall be reckoned from the assessment year relevant to the previous year in which the ^2[undertaking began to manufacture or produce such articles or things or computer software] in such free trade zone or export processing zone : ^3[Provided also that for the assessment year beginning on the 1st day of April, 2003, the deduction under this sub-section shall be ninety per cent of the profits and gains derived by an undertaking from the export of such articles or things or computer software :] Provided also that no deduction under this section shall be allowed to any undertaking for the assessment year beginning on the 1st day of April, ^19[2012] and subsequent years. ^4[(1A) Notwithstanding anything contained in sub-section (1), the deduction, in computing the total income of an undertaking, which begins to manufacture or produ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... any amount credited to the Special Economic Zone Re-investment Allowance Reserve Account under clause (ii) of sub-section (1A),- (a) has been utilised for any purpose other than those referred to in sub-section (1B), the amount so utilised; or (b) has not been utilised before the expiry of the period specified in sub-clause (i) of clause (a) of sub-section (1B), the amount not so utilised, shall be deemed to be the profits,- (i) in a case referred to in clause (a), in the year in which the amount was so utilised; or (ii) in a case referred to in clause (b), in the year immediately following the period of three years specified in sub-clause (i) of clause (a) of sub-section (1B), and shall be charged to tax accordingly.] (2) This section applies to any undertaking which fulfils all the following conditions, namely :- (i) it has begun or begins to manufacture or produce articles or things or computer software during the previous year relevant to the assessment year- (a) commencing on or after the 1st day of April, 1981, in any free trade zone; or (b) commencing on or after the 1st day of April, 1994, in any elect....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... after the 1st day of April, 2001, unless the assessee furnishes in the prescribed form, ^21[****] the report of an accountant, as defined in the Explanation below sub-section (2) of section 288 ^22[before the specified date referred to in section 44AB], certifying that the deduction has been correctly claimed in accordance with the provisions of this section. (6) Notwithstanding anything contained in any other provision of this Act, in computing the total income of the assessee of the previous year relevant to the assessment year immediately succeeding the last of the relevant assessment years, or of any previous year, relevant to any subsequent assessment year,- (i) section 32, section 32A, section 33, section 35 and clause (ix) of sub-section (1) of section 36 shall apply as if every allowance or deduction referred to therein and relating to or allowable for any of the relevant assessment years ^9[ending before the 1st day of April, 2001], in relation to any building, machinery, plant or furniture used for the purposes of the business of the undertaking in the previous year relevant to such assessment year or any expenditure incurred for the purposes of such business....
X X X X Extracts X X X X
X X X X Extracts X X X X
....facture or produce articles or things or computer software during the previous year relevant to the assessment year commencing on or after the 1st day of April, 2006 in any Special Economic Zone.] (8) Notwithstanding anything contained in the foregoing provisions of this section, where the assessee, before the due date for furnishing the return of income under sub-section (1) of section 139, furnishes to the Assessing Officer a declaration in writing that the provisions of this section may not be made applicable to him, the provisions of this section shall not apply to him for any of the relevant assessment years. (9) ^13[***] (9A) ^14[***] Explanation 1.-^15[***] Explanation 2.-For the purposes of this section,- (i) "computer software" means- (a) any computer programme recorded on any disc, tape, perforated media or other information storage device; or (b) any customized electronic data or any product or service of similar nature, as may be notified by the Board, which is transmitted or exported from India to any place outside India by any means; (ii) "convertible foreign exchange" means foreign exchange which is for the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n 6 of the Finance Act, 2000 w.e.f. 01-04-2001 before it was read as, "10A. Special provision in respect of newly established industrial undertakings in free trade zones. (1) Subject to the provisions of this section, any profits and gains derived by an assessee from an industrial undertaking to which this section applies shall not be included in the total income of the assessee. (2) This section applies to any industrial undertaking which fulfils all the following conditions, namely :- (i) it has begun or begins to manufacture or produce articles or things during the previous year relevant to the assessment year - (a) commencing on or after the 1st day of April, 1981, in any free trade zone; or (b) commencing on or after the 1st day of April, 1994, in any electronic hardware technology park or, as the case may be, software technology park; (ia) in relation to an undertaking which begins to manufacture or produce any article or thing on or after the 1st day of April, 1995, its exports of such articles or things are not less than seventy-five per cent of the total sales thereof during the previous year; (ii) i....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... (1) of section 72 or sub-section (1) of section 74 and no deficiency referred to in sub-section (3) of section 80J, in so far as such loss or deficiency relates to the business of the industrial undertaking, shall be carried forward or set off where such loss, or, as the case may be, deficiency relates to any of the relevant assessment years; (iii) no deduction shall be allowed under section 80HH or section 80HHA or section 80-I or section 80-IA or section 80J in relation to the profits and gains of the industrial undertaking; and (iv) in computing the depreciation allowance under section 32, the written down value of any asset used for the purposes of the business of the industrial undertaking shall be computed as if the assessee had claimed and been actually allowed the deduction in respect of depreciation for each of the relevant assessment years. (5) Where an industrial undertaking in any free trade zone has begun to manufacture or produce articles or things in any previous year relevant to the assessment year commencing on or after the 1st day of April, 1977 but before the 1st day of April, 1981, the assessee may, at his option, before the expiry of....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... (c) recording of programmes on any disc, tape, perforated media or other information storage device. (iv) "electronic hardware technology park" means any park set up in accordance with the Electronic Hardware Technology Park (EHTP) Scheme notified by the Government of India in the Ministry of Commerce; (v) "software technology park" means any park set up in accordance with the Software Technology Park Scheme notified by the Government of India in the Ministry of Commerce; (vi) "produce", in relation to articles or things referred to in clause (i) of sub-section (2), includes production of computer programmes;" Earlier, Inserted vide Section 3 of the Finance Act, 1981 w.e.f. 01-4-1981 And was Amended vide Section 4 of the Taxation Laws (Amendment and Miscellaneous Provisions) Act, 1986 w.e.f. 01-04-1987 And was Amended vide Section 126 of the Direct Tax Laws (Amendment) Act, 1987 w.e.f. 01-04-1988/01-04-1989 And was Amended vide Section 5 of the Finance Act, 1987 w.e.f. 01-04-1981/w.e.f. 01-04-1988 And was Amended vide Section 5 of the Finance Act, 1988 w.e.f. 01-04-1989 And was Amended vide Section ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ch articles or things or computer software bears to the total turnover of the business carried on by the assessee." 7. Substituted vide Section 7 of the Finance Act, 2003 w.e.f. 01-04-2003 before it was read as, "sub-section (1)" 8. Substituted vide Section 7 of the Finance Act, 2003 w.e.f. 01-04-2003 before it was read as, "sub-section (1)" 9. Inserted vide Section 7 of the Finance Act, 2003 w.e.f. 01-04-2001 10. Inserted vide Section 7 of the Finance Act, 2003 w.e.f. 01-04-2001 11. Inserted vide Section 7 of the Finance Act, 2003 w.e.f. 01-04-2004 12. Inserted vide Second Schedule of the Special Economic Zones Act, 2005 w.e.f. 10-02-2006 13. Omitted vide Section 7 of the Finance Act, 2003 w.e.f. 01-04-2004 before it was read as, "(9) Where during any previous year, the ownership or the beneficial interest in the undertaking is transferred by any means, the deduction under sub-section (1) shall not be allowed to the assessee for the assessment year relevant to such previous year and the subsequent years." 14. Omitted vide Section 7 of the Fi....