Section 115-O(7) — the law in short
What the courts have decided on section 115-O(7), in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.
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Statutory position — s.115-O(6), (7) and (8): the SEZ developer exemption that died on 1 June 2011, the business trust carve-out and the IFSC unit carve-out
CBDT Circulars & InstructionsCuts both waysValidity unconfirmed
My client is an SEZ developer and paid no DDT on dividends declared out of current income. The Assessing Officer says the exemption was withdrawn. When did it go, and are there other carve-outs I should be looking at?
Section 115-O(6) exempted from tax on distributed profits any amount declared, distributed or paid on or after 1 April 2005 out of its current income by an undertaking or enterprise engaged in developing, or developing and operating, or developing, operating and maintaining a Special Economic Zone, in the hands of the developer or enterprise or the person receiving the dividend — but its proviso says in terms that the provisions of that sub-section shall cease to have effect from 1 June 2011. Two other carve-outs sit alongside it and are still worth checking for a pre-2020 year: sub-section (7) for a specified domestic company distributing to a business trust out of current income on or after the specified date, and sub-section (8) for a company that is a unit of an International Financial Services Centre deriving income solely in convertible foreign exchange, on amounts declared on or after 1 April 2017 out of current income or income accumulated as such a unit after 1 April 2017.
Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.