To give a fillip to manufacturing and industrial
activity in the newly created state of Andhra Pradesh, the Central Board
of Direct Taxes (CBDT) on Friday Sep 30,2016 announced special tax concessions
under the Income-Tax Act to seven districts in the state to boost
manufacturing and industrial activity.
In a
notification issued here the CBDT said that the concessions are being
extended under the Andhra Pradesh Re-organisation Act, 2014. Though the
Act had provided for such a concession, there was undue delay in its
operationalisation as the ruling Telugu Desam Party in the State and the
Centre were exploring various options on a range of issues to help the
new born state.
After more than two years and three
months there was an agreement on September 7 between the Centre and the
State on a special financial package, which was termed as an exact
equivalent of the special status to the state which was promised by the
then Prime Minister Manmohan Singh in the Rajya Sabha in February 2014.
The TDP and the BJP in the course of their election campaign were
committed to get the special status but it was realized later that it
was not feasible.
Friday’s announcement by the CBDT is a follow up to the
special financial package unveiled early in the month. It said that
Centre is extending special assistance to four districts of Rayalaseema
and three districts of North Coastal Andhra Pradesh.
To
further boost the industrial activities, the CBDT has notified these
seven districts for availing tax incentives under Section 32(1)(iia) and
Section 32AD of the Income-tax Act.
The districts are Anantapur, Chittoor, Kadapa, Kurnool, Srikakulam, Visakhapatnam and Vizianagaram.
With
the notification, any manufacturing undertaking set up during the
period from April 1, 2015 to March 31, 2020 in these districts is
eligible for 15 per cent higher additional depreciation and 15 per cent
of investment allowance on the cost of plant and machinery acquired by
it during the period.
The incentives are in addition to other tax benefits available under the Income-Tax Act.
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