Income-tax (16th Amendment), Rules, 2002 - 183/2002 - Income Tax

Income-tax (16th Amendment), Rules, 2002 NOTIFICATION N0.183 Dated 23rd July. 2002 In exercise of powers conferred by section 295 read with Section 80-IA of the Income-tax Act, 1961 (43 of 1961) the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962. namely: - 1. (1) These Rules may be called the Income-tax (16th Amendment), Rules, 2002 (2) They shall be deemed to, have come into force on the lst day of April, 2001. 2. In the Income-tax Rules, 1962, in Rule 18C, with effect from 1st day of April, 2001. (i) For the heading "Eligibility of Industrial Parks for benefits under Section 80-IA(4D)", substitute "Eligibility of Industrial Parks and Special Economic Zones for benefits under Section 80-IA(4)(iii)''; (ii) after sub-rule (1), the following sub-rule shall be inserted, namely:- "(1A) The undertaking shall begin to develop or develop and operate or maintain and operate a special economic zone any time during the period beginning of 1st day of April. 2001 and ending on 31st day of March 2006."; (iii) in sub-rule (2) for the words "Ministry of Industry", the words "Ministry of Commerce and Industry" shall be substituted; (iv) in sub-rule (2) after words "industrial park", the words "or special economic zones" shall be inserted. Sd/- (Sebastian James) Under Secy. (TPL-II) F.N0.142/22/2002-TPL EXPLANATORY MEMORANDUM Under section 10A of the Income tax Act, 1961 undertaking operating from a Special Economic Zone (SEZ), which manufacture articles/things or computer software arc eligible for deduction of export profits. For undertakings commencing operation from the notified Special Economic Zones (SEZs) on or after Ist April, 2002, the tax holiday is available for a total period of seven assessment years, comprising of a deduction of 100% of export profits for five years followed by deduction of 50% of export profits for subsequent two years. 2. Under 80-IA (4)(iii) of the Income-tax Act, 1961, tax holiday equal to 100% of eligible profit for 10 out of initial 15 years is available to any undertaking which develops, or develops and operates or maintains and operates a special economic zone notified by the Central Government in accordance with the scheme framed and notified by the Government for the period beginning on the first day of April, 1997 and ending of the 31st day of March, 2006. 3. Rule 18C of the IT Rules, 1962, provides for eligibility of industrial parks for benefit under section 80-IA(4)(iii) of the I.T. Act. Rule 18C is being amended to enable notification of special economic zones for the purpose of benefit to developers of special economic zones under section 80-IA of the I.T. Act. 4. These changes will come into force with retrospective effect from 1st of April, 2001. 5. It is certified that the above-mentioned amendment to the said rule 18C shall not prejudicially affect the interest of any assessee. Footnote: The principal rules were published under Notification No. S-0.969 dated 26.3.1962 which has been amended from time to time, the last such amendment was made vide notification No. 173/2002 dated 16-7-2002.