Export Incentives

Export Incentives – Export incentives are tax benefits, exemptions, or deductions granted by the government to promote and encourage exports from India. These incentives aim to make Indian goods and services more competitive in global markets by reducing the tax burden on exporters. Under the Income Tax Act, key provisions include: Section 10AA – Provides 100% deduction of profits for the first five years (and partial deduction thereafter) to units established in Special Economic Zones (SEZs) engaged in export of goods or services. Section 80HHC (now phased out) – Earlier allowed deduction of profits derived from export of goods like handicrafts, garments, or merchandise. Apart from tax deductions, exporters may also receive non-tax benefits under schemes such as RoDTEP (Remission of Duties and Taxes on Exported Products) or SEIS (Service Exports from India Scheme) under the Foreign Trade Policy. Example: An SEZ unit earns ₹10 lakh profit from export of handicrafts. The unit claims 100% tax deduction under Section 10AA, thereby reducing taxable income by ₹10 lakh.