As per Section 2(zc) of the Special Economic Zone Act, 2005, Unit means a Unit set up by an entrepreneur in a Special Economic Zone and includes an Offshore Banking Unit.Thus, it can be said that a Offshore Banking Unit means a branch of a bank located in SEZ. The branch needs to obtain the permission under the Banking Regulation Act, 1949 [ Section 23(1)(a)].
As per Section 2(q) of the Special Economic Zone Act, 2005, International Financial Service Centre means a Centre which has been approved by the Central Government under Section 18(1) of the SEZ Act, 2005.
Tax concession under this section is provided to Offshore Banking Unit and International Financial service centre. Under this section, eligible assessee will get tax deduction on profit for specified period provided certain conditions given under this section is satisfied.
The deduction will be allowed for the following incomes included in gross total income of such assessee :
| Particular | Amount of deduction |
|---|---|
| Scheduled bank/foreign bank having offshore banking unit in SEZ | First 5 year* = 100% of income |
| Next 5 years = 50% of income |
*The beginning assessment year relevant to the previous year will be the year in which permission as per Banking Regulation Act or permission of SEBI or under any other law, is obtained.
| Particular | Amount of deduction |
|---|---|
| International Financial Services Centre | Upto A.Y. 2019-20
First 5 year = 100% of income Next 5 years = 50% of income The deduction can be claimed for any 10 consecutive assessment years out of 15 years beginning with year in which necessary permission obtained. From A.Y. 2020-21 100% of income of any 10 consecutive years out of 15 years beginning with year in which necessary permission obtained. |
There is no specific time for Form 10 CCF. This form needs to be filed along with the Income Tax Return Filing. Let’s say, for example, an assessee involved in international transaction and due date of return filing is 30th November, 2020. In this case, Form 10 CCF needs to be filed upto 30th November, 2020 along with the ITR.
Deduction under section 80-LA can be claimed by specified assessee like
Deduction under section 80-LA can be claimed for 10 consecutive years.
