As of 8 November 2026, apply section 144 of the Income-tax Act, 2025 for tax year 2026–27. X Ltd. began…
Tax year 2026–27 is the unit’s fourteenth year, within the final five-year block. The turnover computation uses ₹50,00,000 of qualifying export proceeds and ₹60,00,000 of…
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As of 8 November 2026, apply section 144 of the Income-tax Act, 2025 for tax year 2026–27. X Ltd. began operations in an eligible special economic zone unit in 2013–14. The unit’s profit is ₹24,00,000, its export sales are ₹53,00,000, of which ₹50,00,000 was brought into India within the permitted time, and its domestic sales are ₹10,00,000. It credited ₹8,75,000 to its Special Economic Zone Re-investment Reserve Account. The company has not opted for the concessional corporate tax regime. Assume the other conditions for the deduction are met. What deduction can X Ltd. claim?
Answer and explanation
Correct answer B
Tax year 2026–27 is the unit’s fourteenth year, within the final five-year block. The turnover computation uses ₹50,00,000 of qualifying export proceeds and ₹60,00,000 of total turnover, which includes ₹10,00,000 of domestic sales. Export profit is ₹24,00,000 × ₹50,00,000 ÷ ₹60,00,000 = ₹20,00,000. Half is ₹10,00,000, so the deduction is capped at the ₹8,75,000 credited to the reserve. If total turnover were instead taken as ₹63,00,000, half of export profit would be ₹9,52,381, which still exceeds the reserve credit, so the deduction remains ₹8,75,000.
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West Bengal SET (WB SET)