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News INCOME TAX

  • May 13, 2020
  • Govt plans tax holiday for new investments amid Covid-19 outbreak

    India’s trade ministry is proposing a tax holiday for companies bringing new investments as the government explores measures to support the economy amid the coronavirus pandemic, according to people familiar with the matter.
    The proposal to give a 10-year full tax exemption to companies making new investment upwards of $500 million is being evaluated by the finance ministry, said the people, who asked not to be identified citing rules. The plan requires companies to start operations within three years from June 1, and will cover sectors including medical devices, electronics, telecom equipment and capital goods, they said.
    Another variant of the programme will be to provide a four-year tax holiday to companies that invest $100 million or more in labour-intensive sectors such as textiles, food processing, leather, and footwear.

    A lower corporate tax rate of 10 per cent is proposed for the next six years, the people said. The proposal has to be approved by the finance ministry and, so far, it hasn’t taken a decision.