Disallowance of Section 43B(h) to sez units

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This discussion clarifies that the disallowance provisions of Section 43B(h) of the Income Tax Act do apply to units registered under a Special Economic Zone (SEZ). While SEZ units benefit from tax exemptions under Section 10AA, these do not override the requirement that payments covered by Section 43B(h) must be made within the stipulated time frame to be allowed as a deduction.

Kishor C. Shah

Kishor C. Shah (Querist)
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25 November 2024 I want to know whether Disallowance of section 43B(h) is applicable to units registered under SEZ?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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25 November 2024 Disallowance under Section 43B(h) is applicable to SEZ units. The key point is that payments covered under Section 43B(h) will only be allowed as a deduction when they are actually paid within stipulated time frame, even for SEZ units. The tax exemption benefits under Section 10AA for SEZ units do not extend to bypassing the provisions of Section 43B(h).

Kishor C. Shah

Kishor C. Shah (Querist)
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26 November 2024 Thanks, sir, for your reply.

Thanks ®ards,
Kishor Shah

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Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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26 November 2024 You are welcome.

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