The High Court in a case clarified that if expenses incurred in foreign currency to provide technical services outside India shall be excluded from the total turnover for computation of deduction u/s 10A.  

Section 10A– Special provision in respect of newly established undertakings in free trade zone, etc.:

The benefit in respect of newly established Industrial Undertaking in FTZ, EHTP SEZ or STP is available to all assessee on Export of certain articles or things or software.

Subject to the provisions of this section, a deduction of such profits and gains as are derived by an undertaking from the export of articles or things or computer software for a period of ten consecutive assessment years beginning with the assessment year relevant to the previous year in which the undertaking begins to manufacture or produce such articles or things or computer software, as the case may be, shall be allowed from the total income of the assessee.

Case: Commissioner of Income Tax vs. Tech Mahindra Ltd.

Held:

The assessee, if incurs any expenses in foreign currency on telecommunication charges and providing technical services abroad then, such turnover shall be excluded from total turnover for purpose of computation of deduction under section 10A.

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