To begin with, let’s understand “What is Offshore Banking Unit” and “What is International Service Centre”?
Offshore Banking Unit
As per Section 2(u) of the Special Economic Zones Act, 2005, 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)].
International Financial Service Centre
As per Section 2(q) of the Special Economic Zones 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.
What is section 80-LA?
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.