Hiranandani Realtors proposes 100-acre SEZ in Chennai

Hiranandani Realtors Pvt has proposed to promote its 100 acres of land in the information technology corridor as a special economic zone (SEZ) with focus on IT and ITES.

Raman Giridhardas, vice president-business development, Hiranandani Realtors Pvt, said, "We bought the 100 acres property for over Rs 100 crore in 2005." This is the first property that the company will be promoting in Chennai. The property was purchased from the media group Dhinakaran, when its was owned by A P Kandasamy.

"Our move to promote the 100 acre land as an SEZ is significant considering the fact that the tax concessions enjoyed by software companies are expected to be withdrawn by 2009," he added.

"Once the concessions are withdrawn, software companies have to be located in an SEZ to avail themselves of the tax concessions. So the software companies that are planning to set up facilities would prefer SEZs. We have filed an application before the government to declare the property in IT corridor as an SEZ," he added.

The details of the proposed SEZ is yet to be finalised. However, it would contain a residential development section as well, he added.

A special economic zone for the other sectors would require 100 acres or more, an SEZ for IT and ITES would not require much smaller an area.

In another development, a group of software companies have been working on a plan that envisages getting a part of the industrial park in Siruseri converted into a SEZ in order to take advantage of the tax concessions.

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Eyeing the sops

The main benefit for IT companies in locating themselves in an SEZ would be tax breaks

Companies in an SEZ would qualify for a 100 per cent tax exemption for the first five years. This would be followed by a 50 per cent exemption for the next five years and a 50 per cent of the ploughed back export profits for the following five years

Benefits on indirect taxes could also be significant. For example, service tax paid to recruitment agencies would not be applicable for a unit in an SEZ