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Liberalisation Of Tax Holiday Provision For Infrastructure, Telecom Services, Power Generation, Special Economic Zones, Industrial Parks, etc. [ Section 80-IA]

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

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.
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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