Work From Home Allowed In Special Economic Zone Units

In the year 2020, work from home gained popularity and various sectors in the country were able to shift gears and adopt a total work from home or a hybrid work model. However, companies in Special Economic Zones faced challenges with enabling a work from home structure for their employees due to a lack of uniform guidelines/directions for the same.

Concerns were also raised by certain companies such as the National Association of Software and Service Companies (NASSCOM), regarding the ramifications of a work from home model on the deductions allowed for businesses established in Special Economic Zones under Section 10AA of the Income-Tax Act, 1961. According to Section 10AA, units that have commenced manufacture or production of articles or things or provide services in Special Economic Zones, can avail tax exemptions. A strict interpretation of this Section meant that remote work cannot be considered as having been done from the Special Economic Zone location,