ITAT Grants ₹203 Cr Tax Relief to Genpact India u/s 10AA for Interest Income, Forex Gains, and Export-Linked Expenses

The Income Tax Appellate Tribunal (ITAT) has granted a significant tax relief of Rs 203 crore to Genpact India. The tribunal allowed the company's claim for deduction under Section 10AA of the Income Tax Act on several components of its income, including interest income, foreign exchange gains, and certain export-linked expenses. Section 10AA provides a tax holiday for units located in Special Economic Zones (SEZs). The ITAT held that the interest earned on fixed deposits, which were made to fulfill bank guarantee requirements for setting up the SEZ unit, and foreign exchange gains were intrinsically linked to the export business of the eligible unit. Therefore, these incomes were considered part of the business profits eligible for the deduction. This ruling provides crucial clarity on the scope of income that can be included for calculating the 10AA deduction, benefiting other SEZ units as well.