End of 15-Year Financial Incentives, worry IT Developers in SEZs
SMART CITIES

End of 15-Year Financial Incentives, worry IT Developers in SEZs

Developers of major IT projects in special economic zones (SEZs) within the state are facing considerable concern. The expiration of the 15-year financial incentives under the 'sunset clause' for developers and IT companies in SEZs has rendered it unappealing for firms to establish units in these zones.

Two significant IT projects, namely Prestige Group's 'Prestige Cyber Green I' on 4.61 acres and Lulu IT Infrabuild's 'twin IT tower' on 12.74 acres, both located in SmartCity-Kochi, Kakkanad, are particularly affected by this transition.

Although these projects are in their final construction stages, officials are worried due to the lack of demand from companies, primarily because SmartCity-Kochi IT park operates entirely within the SEZ. An official from Prestige Group acknowledged that this poses a substantial issue within SEZs.

For SEZ developers, the sunset clause for income-tax exemptions expired in April 2017, while for units within these zones, it ended in April 2020.

Once completed, Prestige Cyber Green will encompass a total built-up area of 0.87 million sq ft with a leasable area of 0.54 million sq ft. On the other hand, the 29-storey Lulu twin tower will have a total built-up area of 36 lakh sq ft. The Prestige Group is investing Rs 3 billion in the Kochi project, while Lulu's IT project is estimated to cost Rs 12 billion.

Developers are pinning their hopes on the DESH Act to provide a solution. It's worth noting that companies operating under SEZ must solely cater to the export market, while non-SEZ entities can serve the domestic market as well. An official from Lulu IT admitted that the termination of fiscal exemptions for IT companies in SEZs has made it challenging for developers to attract companies to their facilities.

However, there is a silver lining for new companies established one month prior to April 2020, as they can still enjoy the financial incentives for 15 years. This means the new rule will mainly impact companies that have been in existence for 15 or more years in SEZs, while those newly established in an SEZ before April 2020 can continue to benefit from the incentives until 2035.

Developers of major IT projects in special economic zones (SEZs) within the state are facing considerable concern. The expiration of the 15-year financial incentives under the 'sunset clause' for developers and IT companies in SEZs has rendered it unappealing for firms to establish units in these zones.Two significant IT projects, namely Prestige Group's 'Prestige Cyber Green I' on 4.61 acres and Lulu IT Infrabuild's 'twin IT tower' on 12.74 acres, both located in SmartCity-Kochi, Kakkanad, are particularly affected by this transition.Although these projects are in their final construction stages, officials are worried due to the lack of demand from companies, primarily because SmartCity-Kochi IT park operates entirely within the SEZ. An official from Prestige Group acknowledged that this poses a substantial issue within SEZs.For SEZ developers, the sunset clause for income-tax exemptions expired in April 2017, while for units within these zones, it ended in April 2020.Once completed, Prestige Cyber Green will encompass a total built-up area of 0.87 million sq ft with a leasable area of 0.54 million sq ft. On the other hand, the 29-storey Lulu twin tower will have a total built-up area of 36 lakh sq ft. The Prestige Group is investing Rs 3 billion in the Kochi project, while Lulu's IT project is estimated to cost Rs 12 billion.Developers are pinning their hopes on the DESH Act to provide a solution. It's worth noting that companies operating under SEZ must solely cater to the export market, while non-SEZ entities can serve the domestic market as well. An official from Lulu IT admitted that the termination of fiscal exemptions for IT companies in SEZs has made it challenging for developers to attract companies to their facilities.However, there is a silver lining for new companies established one month prior to April 2020, as they can still enjoy the financial incentives for 15 years. This means the new rule will mainly impact companies that have been in existence for 15 or more years in SEZs, while those newly established in an SEZ before April 2020 can continue to benefit from the incentives until 2035.

Next Story
Infrastructure Urban

Aadhaar Authentications Cross 27 Billion in FY25

Aadhaar authentication transactions surged past 27.07 billion in FY 2024–25, including 2.47 billion in March alone, reflecting its growing adoption across sectors such as banking, finance, telecom, and public service delivery. Since its inception, the cumulative number of Aadhaar authentication transactions has exceeded 148 billion.The Unique Identification Authority of India’s (UIDAI) AI/ML-based face authentication technology is also witnessing a sharp rise in usage. In March 2025 alone, over 150 million face authentication transactions were recorded. This biometric modality is now used ..

Next Story
Infrastructure Urban

IEPFA Holds Preparatory Meet for 'Niveshak Shivir' Initiative

The Investor Education and Protection Fund Authority (IEPFA), under the Ministry of Corporate Affairs, Government of India, hosted a preparatory meeting on April 28, 2025, with Nodal Officers from stakeholder companies via video conference. The session, chaired by IEPFA CEO Smt. Anita Shah Akella, focused on finalising operational plans for the upcoming ""Niveshak Shivir"" initiative—a joint effort between IEPFA and the Securities and Exchange Board of India (SEBI).""Niveshak Shivir"" aims to improve investor services and streamline the claims process by reaching out to cities with a high nu..

Next Story
Infrastructure Urban

India, France Sign Deal for 26 Rafale-Marine Jets for Navy

India and France have signed an Inter-Governmental Agreement (IGA) for the acquisition of 26 Rafale-Marine aircraft for the Indian Navy, comprising 22 single-seater and four twin-seater jets. The deal also includes training systems, simulators, associated equipment, weapons, and performance-based logistics, along with additional equipment for the Indian Air Force’s existing Rafale fleet.The IGA was signed by India’s Defence Minister Rajnath Singh and French Minister of Armed Forces Sébastien Lecornu. The agreement, along with supply protocols for aircraft and weapons, was exchanged in the..

Advertisement

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Advertisement

Talk to us?