« Top Headlines » Open DEMAT Account in 24 hrs  ITR Filing and Income Tax Audit Deadline Extended: 5 Critical Things Taxpayers Must Know  Filing Belated ITR for AY 2026-27? Know Which Losses You Can Carry Forward and Which You May Lose  CBDT Extends Tax Audit Report Deadline to October 21, ITR Filing Last Date to November 21 for AY 2026-27  CBDT Extends AY 2026-27 ITR Filing Deadline for Tax-Audit Cases: New Dates and Key Compliance Details  Foreign Assets Missing From Your ITR? Income Tax Department Opens One-Time Disclosure Window  Tax Audit Deadline September 30: Why AIS, TDS and GST Figures May Not Match Your ITR and What Taxpayers Should Do  Tax audit deadline September 30: Common mistakes taxpayers should avoid  Your ITR says ‘verified’, but the refund hasn’t arrived? 5 reasons why your money could be stuck  Missed the ITR Deadline but TDS Refund Is Due? Here’s How You Can Still Claim Your Money  ITAT Cuts ?4.85 Lakh Penalty After ?14.02 Lakh Interest Income Was Missed in ITR  ITR filed under old regime, tax calculated under new regime; Delhi ITAT gives taxpayer relief «  Commodity, stock exchanges may get service tax relief... Centre plans to roll out uniform tax regime in'10... » Revenue dept rejects tax sops for IT hardware October, 23rd 2006 The policy to boost electronics and IT hardware manufacturing in the country has hit the revenue roadblock. The department has turned down all recommendations for tax sops by the sub-group under the Prime Ministers office task force. All the recommendations of the group including a five-year tax holiday, tax credit of up to 30% of the investment value, zero per cent customs duty on all capital goods for manufacture of electronic and IT products have not found favour with the revenue department. In its response to the draft recommendations, the department has said that the current tax regime was moderate and thus there was no justification of extending a tax holiday for five years to any new sector. The department, on the contrary, wants a review of the existing tax benefits. Further, it said the tax benefits available to export-oriented units, software technology parks will get over by 09 as per the sunset clause and there was no justification of adding a new sector. On the recommendation for tax credit, the department opined that it resembled investment allowance which was given under the Finance Act of 1976 to compensate for the high inflation of 17-20% during those days. This was withdrawn in 1990. Moreover, in a low interest rate regime there is no shortage of credit, the department said. On the sub-group's recommendation seeking enhancement of depreciation for computers from 60% to 100%, depreciation in every three years, the department said the rate of 60% annually was reasonable. It also rejected the suggestion for removal of withholding tax on fee for transfer of technology saying that the withholding tax (tax deducted at source) was the only effective mode of contemporaneous collection of taxes. In fact, the coverage of TDS has been expanded to ensure prompt collection of taxes and to counter evasion. The department rejected the recommendation for 0% customs duty on all capital goods and inputs for manufacture of all electronic and IT hardware products saying that such a move could create a problem for the domestic industries which produce these inputs. Also, it said the policy now was to get away from end-user base exemptions. However, it said if there are raw materials, intermediates and capital goods which are for exclusive use in the industry and do not have any indigenous angle, a lower rate of import duty below the peak rate could be considered. On the issue of higher incidence of taxation in the country, the department said there was a need to bring them down for the industry in general. But this, it said, would have to be done gradually in keeping with the revenue considerations. The common goods and service tax with both state and Centre having concurrent but independent jurisdictions on common tax bases is already on the radar. The department said it was not possible to carve out a separate scheme of concessional excise duty on electronic duty as it would not only involve substantial revenue loss but also invite similar requests from other sectors of trade and industry. Current exemptions on the excise front are already proving to be a drag on the government's excise collections. As the local software sector has already proved its mettle world over, the Prime Minister's office had set up the task force suggest ways and means to boost IT hardware. Member secretary Planning Commission is the chairman of the sub-group.