Introduction
Property valuation within India’s Special Economic Zones (SEZs) is becoming more important than ever. In 2025, with updated SEZ rules, investors, developers, and businesses must align with new compliance requirements while maximizing tax and operational benefits.
Unlike regular property valuations, SEZ valuations involve a deeper assessment of regulatory frameworks, tax incentives, and usage restrictions. This updated guide explains the rules, benefits, and valuation methods for SEZ properties in 2025, supported by expert insights and compliance best practices.
A Software/IT company had a land parcel at SEZ(Special Economic Zone) with specific benefits of consumption of FSI (Floor Space Index) within a speculated course of time.
The Situation
- The company has consumed very less FSI in comparison to the potential/ benefits of FSI approved by SEZ.
- Timelines for consuming the benefits of FSI approved by SEZ have lapsed.
- There are many other land parcels available at SEZ with the benefits of FSI.
- Allotted land should be used for Software/IT exports only.
- Developed Valuation of a Property cannot be rented/sold if not developed allotment of land stands canceled by SEZ.
The Burning Question
How do we arrive at the value of existing developed property (Land & Building)?
Answers we wrote down
After several discussions held internally, we managed to conduct the exercise & provide the value of the assets. We also ensured that the assets are correctly valued. Our response to the question that arose was as follows:
- We have arrived at the value of land based on FSI-based valuation considering total available/potential FSI over its less lapsed FSI area which gives us an exact value of land with its consumed FSI.
- The value of the building was arrived at by cost approach as developed property cannot be rented/sold.
Also Read, Valuation of a partially-constructed Thermal Power Plant
FAQs:
1. How is property valuation in SEZ different from normal valuation?
SEZ valuations factor in regulatory incentives, tax benefits, and usage restrictions, unlike standard property valuations.
2. What are the key benefits of SEZ property valuation in 2025?
Accurate valuation ensures compliance with SEZ rules, helps in tax planning, and strengthens investor confidence.
3. Who regulates SEZ property valuations in India?
SEZ valuations are guided by the Ministry of Commerce and industry-specific compliance rules, often verified by registered valuers.
4. Can SEZ property be used for non-SEZ purposes?
No, SEZ properties are strictly governed by their approved usage under SEZ regulations, and deviation may attract penalties.
About the author:
Sahil Narula
Sahil Narula is the Managing Partner at RNC Valuecon LLP and a Registered Valuer with IBBI. He brings over a decade of experience in Valuation Services, Corporate Finance, and Advisory, having led numerous complex assignments under the Insolvency & Bankruptcy Code, 2016, Mergers & Acquisitions, Insurance, and Financial Reporting.
He is a regular speaker at national forums (ASSOCHAM, CII, ICAI, IBBI, Legal Era) and currently serves as Co-Chairman of ASSOCHAM’s National Council on Insolvency & Valuations and a member of CII’s Task Force on Insolvency & Bankruptcy.
🤝Connect with Sahil on LinkedIn.