Section 139 — SEZ Developer 80-IAB | ITA 2025

Section 139 — SEZ DEVELOPER PROFITS DEDUCTION (1961 s. 80-IAB SUCCESSOR)

Section 139 is the substantive equivalent of 1961 s. 80-IAB. Continuation provision for SEZ-developers (legacy approvals before sunset 1-Apr-2017) — 100% deduction of profits for 10 consecutive AYs out of first 15. Distinct from s. 145 (1961 s. 10AA) which provides exemption for SEZ-UNITS (operating companies in SEZs) — s. 139 covers DEVELOPERS who establish/operate the zone itself. Sunset: most new SEZ-developer notifications post-31-Mar-2017 do NOT qualify.

Statutory text — Income-tax Act, 2025

Marginal note — Deductions in respect of profits and gains by an undertaking or an enterprise engaged in development of Special Economic Zone

In respect of any tax year, where—

(a) the gross total income of an assessee, being a Developer, includes any profits and gains derived by an undertaking or an enterprise from any business of developing a Special Economic Zone, notified on or after the 1st April, 2005 under the Special Economic Zones Act, 2005 (28 of 2005) referred to in section 80-IAB of the Income-tax Act, 1961 (43 of 1961); and

(b) such assessee is eligible to claim a deduction from the profits and gains derived from such business for such tax year under the provisions of the said section, as if the said Act had not been repealed, there shall be allowed, in computing the total income of the assessee, a deduction from the profits and gains derived from such business, subject to the conditions that—

(i) the amount of deduction is calculated as per the provisions of section 80-IAB of the Income-tax Act, 1961 (43 of 1961); and

(ii) the deduction under this Act shall be allowed only for such tax years, as would have been allowed under section 80-IAB of the Income-tax Act, 1961 (43 of 1961), as if the said Act had not been repealed.

Corresponding provision — 1961 regime

INCOME-TAX ACT, 2025	INCOME-TAX ACT, 1961
INCOME-TAX ACT, 2025 — s. 139	INCOME-TAX ACT, 1961 — s. 80-IAB
SEZ-developer 100% deduction 10 of 15 AYs	Same
Sunset for new approvals post-1-Apr-2017	1961 s. 80-IAB(1) proviso

PLANNING NOTES

(i) For legacy SEZ-developers (BoA approval before 1-Apr-2017), the 10-year deduction window is the principal asset. (ii) MAT 15% interaction applies. (iii) For SEZ-units (operating companies), see s. 145 (1961 s. 10AA equivalent) — separate / different regime. (iv) Co-developer deduction available on similar terms — verify Letter of Approval from SEZ-Authority.

CROSS-REFERENCES

Section 145 — SEZ-Unit s. 10AA exemption.
Section 138 — General infrastructure deduction.
SEZ Act, 2005.

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