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Finance Ministry Restricts Scope of SEZs Developers
| March 6, 2007 |  (Be the first to rate this story!) Loading ... |
Seeing real estate developers being bullish on development of Special Economic Zones (SEZs), the finance ministry forbids tax concessions to contractors involved in the construction work.
The 10 year tax benefits under Section 81A of the Income Tax Act will be limited to the builders who themselves I execute the development work. But the benefits of the acts are still there for those who take up civil construction for SEZs. Changes would be made effective from April 2000 and valid for assessment year 2000-01 onwards, as according to proposals forwarded in Budget 2007-08.
The Budget also has provisions to keep a check over migration of existing industries to SEZs for availing tax sops. It says to provide tax breaks to only those units which are tro begin the production from April 2006.
The most obvious way in which the Budget affects promoters is by any change in the tax structure. The proposals have forced the real estate developers to leave their planning in middle. Of the 63 SEZs notified, only six have been promoted by prominent property developers like DLF, Rahejas, and Ansals. The proposals are believed to serve as a catalyst in adding to the building cost of non real estate SEZ promoters.
News Published Under: Special Economic Zones |
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