New IT Act 2025 — Knowledge Bank

Deduction in respect of profits and gains by an undertaking or enterprise engaged in development of Special Economic Zone

Section 139 — Deduction in respect of profits and gains by an undertaking or enterprise engaged in development of Special Economic Zone

Old Act equivalent: Section 80-IAB of IT Act 1961 Sub-part: Deductions from total income

Statutory Text

  1. In respect of any tax year, where—

(a) the gross total income of an assessee, being a Developer, includes any profits and gains derived by an undertaking or an enterprise from any business of developing a Special Economic Zone, notified on or after the 1st April, 2005 under the Special Economic Zones Act, 2005 (28 of 2005) referred to in section 80-IAB of the Income-tax Act, 1961 (43 of 1961); and

(b) such assessee is eligible to claim a deduction from the profits and gains derived from such business for such tax year under the provisions of the said section, as if the said Act had not been repealed, there shall be allowed, in computing the total income of the assessee, a deduction from the profits and gains derived from such business, subject to the conditions that—

(i) the amount of deduction is calculated as per the provisions of section 80-IAB of the Income-tax Act, 1961 (43 of 1961); and

(ii) the deduction under this Act shall be allowed only for such tax years, as would have been allowed under section 80-IAB of the Income-tax Act, 1961 (43 of 1961), as if the said Act had not been repealed.

Special provision in respect of specified business.

Provisos

None.

Explanations

None.

Tables

Present in statutory text above — see formatted section.

Key Structure

  • Applies to: All assessees being developers of Special Economic Zone
  • Conditions: Undertaking/enterprise engaged in development of SEZ notified under SEZ Act, 2005
  • Time limits: 100% of profits for 10 consecutive years out of 15 years from notification of SEZ
  • Monetary limits: Deduction limited to profits derived from SEZ development
  • Exceptions: Must be developer approved under SEZ Act; formed by splitting/reconstruction restrictions apply

Cross-References

  • Section 80

Amendment Notes

None noted from the extracted pages.

Practical Notes

  • Circular 12/2025
  • Circular 14/2025
  • Circular 5/2023

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