Relief for Genpact: ITAT Allows S.10AA Deduction on Interest from FDs and Staff Loans

In a significant relief for Genpact, the ITAT (Income Tax Appellate Tribunal) has allowed "Section 10AA deduction on interest from FDs (Fixed Deposits) and staff loans." Section 10AA provides tax holiday to units in Special Economic Zones (SEZs). The tribunal ruled that interest income earned by an SEZ unit from Fixed Deposits (which are necessary for business operations or regulatory compliance) and from staff loans (which are ancillary to business) should be considered as business income eligible for the 10AA deduction. This clarifies the scope of eligible income for SEZ units.