sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
Latest Expert Exchange
News Headlines »
 How to save income tax and earn high returns? Problem solved! Invest in these schemes - From PPF to NPS,
 Non-filers will have 21 days to file I-T returns, submit response: CBDT
 Deduction Of Tax At Source-Income-Tax Deduction From Salaries Under Section 192 Of The Income-Tax Act, 1961
 Deduction Of Tax At Source-Income-Tax Deduction From Salaries Under Section 192 Of The Income-Tax Act, 1961
 5 mistakes you should avoid while filing income tax returnsa
 Income tax exemption, relief for farmers? 5 expectations from interim budget 2019
 PCIT vs. Perfect Circle India Pvt. Ltd (Bombay High Court)
 The National Company Law Tribunal (Amendment) Rules, 2019 notified
 Get income tax refund in one day from 2020
 Your ITR filing will soon get processed in just one day
 Here's how These new tax laws allow you to save more tax in FY2018-19

Tax sleuths put cos setting up SEZ arms under scanner
February, 07th 2009

The Income-Tax department is scrutinising companies that have set up subsidiaries or units in special economic zones (SEZ) after it found
that many of these firms were using their SEZ operations as a vehicle for claiming undue tax benefits.

The modus operandi adopted by a number of companies is to manipulate the accounts to transfer the profits generated in their regular business to the subsidiaries set up in these zones. SEZ units are exempted from taxation under Section 10 A and Section 10 AA of the Income-Tax Act.

The benefits from such unscrupulous operations are two-fold: First, a company can claim exemption for the income for which tax has to be paid in normal course. Second, it can show huge turnover and profit in the balance sheet which is attractive to the stock market and yet stay out of the tax net.

The investigation wing of the Mumbai income-tax department has come across this novel modus operandi of tax evasion after it raided three companies having subsidiaries in SEZs. The department found that the main purpose of setting up companies in SEZ is to claim tax exemptions accorded to SEZ units. The companies manipulated the accounts to create a picture of huge transactions and profits from the SEZ subsidiaries while, in fact, these units by and large were just dummy units without any serious operation.

According to the I-T officials who have access to this information, the tax evaded by transferring profits to companies set up in SEZs is huge. The officials suspect that several big corporates too could be involved in evasion of taxes in this manner.

The renewed focus of I-T officials on SEZ units comes in the wake of an expected shortfall in direct tax collection, projected to be Rs 3.95 lakh crore. The department has the huge task of collecting Rs 1,00,000 crore in the remaining two months of the current fiscal. This has forced the I-T department to ensure all forms of leakage in tax collection is plugged.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2019 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Content Management System development CMS development Content Management Solutions CMS Solutions Content Management Services CMS Services CMS Software

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions