M/s EBM Infotech Private Limited, engaged in the export of notified goods established a Unit in SEZ, Noida and started services from 1st April, 2012. During the previous year ending 31-03-2024, it has received considerat

As per the provisions of Explanation 1 of section 10AA of Income-Tax Act, 1961 states that: For the purposes of this section, "Export turnover" means the consideration in respect of export by the undertaking, being the Unit of articles or things or services received in, or brought into, India by the assessee in convertible foreign exchange but does not include freight, telecommunication charges or insurance attributable to the delivery of the articles or things outside India or expenses, if any, incurred in foreign exchange in rendering of services (including computer software) outside India; A. Calculation of Export Turnover of Unit Particulars (Amounts in ₹) Consideration from Export of goods 45,00,000 Less: Freight Paid (1,25,000) Insurance Charges (62,500) Eligible Export Turnover 43,12,500 Note: Packing charges and C&HA commission as expenses and charged in the bill of supply are not expressly excluded as per above explanation, hence will be part of export turnover. B. Calculation of Profit eligible for deduction: Total Turnover (₹ 43,12,500 + ₹ 15,00,000) = ₹ 58,12,500 Profit of the Unit in SEZ * Export Turnover of Unit Total Turnover of SEZ Unit ₹ 7,50,000 * ₹ 43,12,500 / ₹ 58,12,500 = ₹ 5,56,452 C. Amount of deduction allowed under section 10AA for AY 2024-25: Maximum amount of deduction allowed as per section 10AA (1) (ii) of the Income tax Act will be 50% of the profit eligible for deduction as debited to P&L Account and credited to the "Special Economic Zone Re-investment Reserve Account" which comes to: Amount credited to Reserve Account. Profit of the Unit in SEZ 7,50,000 * 75% = ₹ 5,62,500 Thus, Maximum Deduction allowed is: 50% of Profit eligible for deduction 5,56,452 * 50% = ₹ 2,78,226 which is within the limit of above ₹ 5,62,500