On 5 August 2026 the Income Tax Department issued Notification No 108/2026 under Scheme Office SO 4320E notifying the application of Schedule III Table Sl No 36 read with Section 11 of the Income Tax Act 2025 30 of 2025 in the case of the Noida Special Economic Zone Authority The notification addresses the tax treatment of income generated within the Noida SEZ specifying the applicability of SEZ specific tax incentives capital gain exemptions for developer earnings and the compliance requirements for unit approvals and audited financial disclosures It aims to align the SEZ operators financial reporting with the 2025 Acts framework while preserving the fiscal incentives designed to attract foreign direct investment and manufacturing expansion The notification becomes effective 1 April 2027 with the Authority required to submit annual compliance certificates and audited financial statements to the Principal Chief Commissioner of Income Tax SEZ
Key Takeaways
- SEZ Specific Tax Incentive Framework The notification clarifies that income derived from SEZ development and operation qualifies for 100 tax exemption for the first five years and 50 percent for the subsequent five years provided the Authority meets prescribed reinvestment and job creation benchmarks outlined in the 2025 Act
- Mandatory Annual Compliance Certificates The Noida SEZ Authority must submit annual compliance certificates audited financial statements and details of foreign exchange earnings and outgoings to the Principal Chief Commissioner failure of which results in the suspension of tax incentives and initiation of regular assessment procedures
- Capital Gain Treatment for Developer Earnings Capital gains arising from the sale of developed plots or facilities within the SEZ are subject to specified indexation benefits and exemption limits with the notification providing a detailed computation methodology to prevent arbitrary tax demands and ensure investor confidence
Disclaimer:This article is compiled and summarized based on publicly available information and is for general information and academic exchange purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. For tax planning, please consult a qualified professional tax advisor or legal counsel.
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