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Tax Holiday To Enterprises Providing Telecommunication Services, Industrial Parks, New Hotels And Having Commercial Production Of Mineral Oil

[ Deductions Allowed to NRIs in the Computation of Total Income and Tax Payable]

A new provision has been made to provide for 100% deduction from the profits and gains of an assessee engaged in the business of providing tele-communication services for the initial five assessment years. A deduction of 25% (30% in the case of companies) from such profits and gains will be allowed for a further period of five years. Thus, the total period of tax holiday will be 10 years. This deduction will be allowed to an undertaking which begins to provide the telecommunication services at any time during the period beginning on 1.4.1995 and ending on 31st March, 2005.


Another amendment relates to the extension of the tax holiday to industrial parks notified for this purpose, in accordance with any scheme framed by the Central Government. Vide Notification No. S.O. 193(E) dated 30.3.1999 an Industrial Park/Industrial Model Town Scheme has been notified. This tax holiday will encourage investments in industrial infrastructure. Those industrial parks which start operating during the period beginning on 1st April, 1997 and ending on 3 1.3.2009 will be eligible for 100% deduction for 10 assessment years.


Another amendment relates to the deduction equal to 50% of the profits of hotels which are located in a hilly or rural area or a place of pilgrimage or where tourism infrastructure needs to be developed. This will be allowed for a period of ten assessment years to hotels which start functioning at any time during the period from 1.4.1997 to 31.3.2001. In respect of hotels located at any other place, the deduction shall be 30% of the profits. However, the hotels located in the metropolitan cities of Calcutta, Chennai (Madras), Delhi and Mumbai (Bombay) will not be eligible for this tax deduction. This amendment will be effective from the A.Y. 1998-99 and subsequent years. Such hotels must be owned by a limited company only, having a paid up capital of not less than 5 lakh. Profits of agro-based industries, meat and meat products or poultry or marine or dairy products would also be exempt u/s 80IB (IIA).


From the A.Y. 1998-99 an undertaking having commercial production of mineral oil in the North-Eastern States of India would be eligible to 100% tax holiday for a period of initial seven assessment years, provided the refining does not begin on or after 1.4.2009.


The Finance Act, 1999 had extended the benefit of tax holiday for undertakings setting up new transmission lines on or after 1.4.1999 but before 1.4.2003 to profits derived tberefrom as are available from power generation undertakings. Industries in notified areas in NorthEast States would enjoy full tax holiday for ten assessment years, under new Section IOC inserted by the Finance Act, 1999 from the A.Y. 1999- 2000 and under Section 801C inserted by the Finance Act, 2003 from the AY. 2004-2005.
Deductions Allowed to NRIs in the Computation of Total Income and Tax Payable
1.Tax Benefit Regarding Life Insurance Premium, PPF Contributions, Nscs, Tuition Fees, etc.
2. Deduction For Donations To Certain Funds And Charitable Institutions
3. Deduction In Respect Of Profits And Gains From A New Industrial Undertaking Or Infrastructural Facility
4. Five-Year Tax Holiday To Hospitals At Certain Locations Sec. 80-1B (IIC)
5. Tax Holiday To Enterprises Providing Telecommunication Services, Industrial Parks, New Hotels And Having Commercial Production Of Mineral Oil
6. Five Year Tax Holiday For New Industrial Undertakings In Industrially Backward Areas & Districts
7. Liberalisation Of Tax Holiday Provision For Infrastructure, Telecom Services, Power Generation, Special Economic Zones, Industrial Parks, etc. [ Section 80-IA]
8. Ten Year Tax Holiday In Respect Of Certain Undertakings In Himachal Pradesh, Sikkim, Uttaranchal And N.E. States Section 80-IC
9. Five-Year Tax Holiday For Hotels In Districts Having A World Heritage Site Sec. 801D
10. Tax Holiday For Hotel And Convention Centres In NCT Of Delhi And Other Areas Section 801D
11. Deduction’ In Respect Of Medical Insurance Premia Section 80D
12. Additional Deduction For Health Insurance Premium Paid For Parents Section 80D
13. Deduction Of Repayment Of Loan For Higher Studies Section 80E
14. Deduction In Respect Of Certain Undertakings In North Eastern States
15. Other Deductions Like Depreciation, Etc. To Nonresident Indians

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Tax Guide for NRI - Tax Planning, Tax Saving, Investment Guidance for Non-Resident Indians !

1. Basic Aspects Of Tax Planning For NRIs
2. How an NRI can Avoid Clubbing of his Incomes and Wealth with that of his Spouse and Children
3. The Incomes of an NRI completely Exempt from Income Tax
4. Capital Gain of an NRI could be Completely Exempt from Income Tax
5. Items completely Exempt from Wealth Tax for an NRI
6. Special Procedure of Assessment regarding Income of an NRI from Foreign Exchange Assets
7. Deductions Allowed to NRIs in the Computation of Total Income and Tax Payable
8. Procedure for the Filing of Income Tax and Wealth Tax Returns, Assessment, and Refunds
9. Gifts by NRIs to Relatives and Friends can be made fully Exempt from Gift Tax
10. FEMA and NRIs Preliminary Aspects Analysed
11. Acquisition and Transfer of Immovable Property in India by NRIs and FEMA
12. Permissible and Prohibited Current Account Transactions in Case of NRI
13. Investment In Shares, Securities, Units And Other Activities, etc. by an NRI in India
14. Deposits in India by an NRI
15. RFC account of a Returning NRI and Investment Abroad
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