Ascendas India Trust (AIT): may be impacted by Indian budget imposing tax on Special Economic Zones (SEZ). Developers of, and units operating within, assets classed as SEZ now have to pay a minimum alternate tax (MAT) of 18.5% (wef. Apr 2012) and a dividend distribution tax of 17% (wef Jun 2011). Previously SEZs enjoyed 100% tax exemption. Meanwhile the tax benefits available for STPI assets (IT parks) - an earlier scheme - have now expired...
The higher taxes were levied despite intense industry lobbying, which is likely to continue.
AIT’s existing assets are mostly classed as IT parks. However, the acquisitions it announced in Feb 2011, as well as its development projects in its Bangalore IT park, will be classed as SEZ assets.
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