Various modification were made to Section 80-IA by the Finance Act, 2001 from the A.Y. 2002-2003 and by the Finance Act, 2006 to provide incentives for infrastructure, etc. These modifications in brief are:
(a) The existing two-tier benefit to provide a 10-year tax holiday is replaced by a new provision that for an infrastructure facility in the nature of a road, including a toll road, bridge, rail system, highway project, water supply project, sanitation, sewerage and solid waste management system, a 10-year tax holiday may be availed consecutively out of 20 years beginning from the year in which the undertaking begins operating the infrastructure facility.
(b) An identical 10-year tax holida9 may be availed in a block of 15 years in the case of other infrastructure, namely, for airport, port, inland port and inland waterways.
(c) The mandatory requirements that such infrastructure facility shall be transferred to the Central Government, State Government, local authority or any other statutory authority, has been removed.
(d) The two-tier benefit available to undertakings in telecommunication services is reintroduced and it is extended to internet service providers and broadband networks, for those undertakings which provide the services on or before 31.3.2004.
(e) The tax holiday period to undertakings commencing generation of power or laying a network of new transmission and distribution lines on or before 3 1.3.2010 would be allowed for a 10-year period in place of the two-tier benefit out of the initial 15 years.
(1) The tax benefit available to the developers of industrial parks has been extended to the developers of Special Economic Zones.
Thus, this benefit would be available to the developers of new special economic zones and also to developers of industrial parks if such industrial parks are developed on or before 31.3.2009. Further, the tax holiday period would be ten-year period which could be availed in ten consecutive assessment years in a block of fifteen years.
The ten-year tax holiday benefit is extended to include a navigational channel in the sea as laying and operating, cross-country gas distribution network, including gas pipeline and storage facilities being an integral part of the network. This amendment is made by the Finance Act. 2007, effective from the A.Y. 2008-2009. Amalgamation or merger on or after 1.4.2007 would not entitle the benefit of Section 801A.
Tax benefit u/s 1OAA would be given only to promote new industry and new investment in SEZs and not to facilitate migration of existing industries by splitting up or the reconstitution of an already existing business, etc. This amendment was made by the Finance Act, 2007 with retrospective effect from 10.2.2006.