Bid to boost private investments |
In an apparent bid to boost private investment in development of industrial parks, the Central Board of Direct Taxes (CBDT) has come up with a new scheme that seeks to extend 100 per cent tax deduction on profits derived by an undertaking from the activity of developing or operating an industrial park.
The developer can avail itself of this tax benefit at its option for any 10 consecutive years in subsequent period of 15 years after the date of commencement. This tax break would be available only for parks set up between April 1, 2006 and March 31, 2009. Focus on manufacture
Official sources said that the new scheme has sought to focus on manufacturing activity alone unlike the previous scheme that left it open for both manufacturing and services activities to be undertaken within the park.
The earlier scheme was framed in 2002 and the tax deduction was available only up to March 31, 2006. The new scheme provides for another three years to set up a park to get the benefits. It is called industrial park scheme, 2008 and is applicable to any undertaking that develops and operates or maintains and operates an industrial park.
For an undertaking to be eligible for tax deduction under Section 80-IA (4) (iii), the park should have a minimum of 30 units and the area allocated to these units should not be less than 90 per cent of the allocable area. It is also stipulated that the park should be owned by only one undertaking.
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