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Tax incentives for settip up Semi-Conductor Companies in India

Tax incentives for settip up Semi-Conductor Companies in India

15 Jul, 2026

𝐓𝐚𝐱 𝐢𝐧𝐜𝐞𝐧𝐭𝐢𝐯𝐞𝐬 𝐟𝐚𝐫 𝐬𝐞𝐭𝐭𝐢𝐩 𝐮𝐩 𝐒𝐞𝐊𝐢-𝐂𝐚𝐧𝐝𝐮𝐜𝐭𝐚𝐫 𝐂𝐚𝐊𝐩𝐚𝐧𝐢𝐞𝐬 𝐢𝐧 𝐈𝐧𝐝𝐢𝐚
Government has provided various tax advantages to semi-conductor units for setting up their Companies in India.

One of the major benefit that 𝑰𝒏𝒄𝒐𝒎𝒆 𝑻𝒂𝒙 𝑚𝒄𝒕, 2025 provides for semi -conductor companies is that deduction shall be allowed for the whole of the capital expenditure incurred by Companies engaged in manufacturing semi-conductor fabrications. The deduction is allowed if operations have been commenced on or after 1 𝒔𝒕 𝑚𝒑𝒓𝒊𝒍, 2014.

Where capital expenditure has been incurred before commencement of operations, deduction shall be allowed in the tax year where operations have been commenced.
The said company is required to make an application under 𝑭𝒐𝒓𝒎 19 for notifying their Company under 𝒔𝒆𝒄𝒕𝒊𝒐𝒏 46 𝒐𝒇 𝒕𝒉𝒆 𝑚𝒄𝒕 to avail the tax benefits.

𝐅𝐀𝐐𝐬

𝑞1. 𝑟𝒉𝒐 𝒊𝒔 𝒓𝒆𝒒𝒖𝒊𝒓𝒆𝒅 𝒕𝒐 𝒇𝒊𝒍𝒆 𝑭𝒐𝒓𝒎 19.
𝐀𝐧𝐬𝐰𝐞𝐫: Form 19 is required to be filed by Companies engaged in manufacturing semi-conductor fabrication.

𝑞.2. 𝑰𝒔 𝑭𝒐𝒓𝒎 19 𝒎𝒂𝒏𝒅𝒂𝒕𝒐𝒓𝒚 𝒕𝒐 𝒃𝒆 𝒇𝒊𝒍𝒆𝒅 𝒃𝒚 𝒔𝒆𝒎𝒊-𝒄𝒐𝒏𝒅𝒖𝒄𝒕𝒐𝒓 𝑪𝒐𝒎𝒑𝒂𝒏𝒊𝒆𝒔 𝒕𝒐 𝒂𝒗𝒂𝒊𝒍 𝒕𝒂𝒙 𝑪𝒐𝒎𝒑𝒂𝒏𝒊𝒆𝒔
𝐀𝐧𝐬𝐰𝐞𝐫: 𝐘𝐞𝐬, it is mandatory to file Form 19 to avail tax benefits.

𝑞.3 𝑟𝒉𝒂𝒕 𝒄𝒐𝒏𝒅𝒊𝒕𝒊𝒐𝒏𝒔 𝒂𝒓𝒆 𝒓𝒆𝒒𝒖𝒊𝒓𝒆𝒅 𝒕𝒐 𝒃𝒆 𝒇𝒖𝒍𝒇𝒊𝒍𝒍𝒆𝒅 𝒕𝒐 𝒂𝒗𝒂𝒊𝒍 𝒕𝒂𝒙 𝒃𝒆𝒏𝒆𝒇𝒊𝒕𝒔?
𝐀𝐧𝐬𝐰𝐞𝐫: Following Conditions needs to be fulfilled:
▶Unit is engaged in manufacturing semi-conductor fabrication.
▶The unit has been approved by the competent authority on the recommendations of the Appraisal Committee under the Modified Special Incentive Package Scheme,
▶The date of commencement of operations is on or after 1 April 2014, and
▶All manufacturing facilities of the unit are located in India


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