TAX CONCESSIONS AND
INCENTIVES
Presented by:- Deepak Goyal
Gaurav Kumar
Neha Singh
Nidhi
Pragati sharma
INTRODUCTION
Tax concessions are some deductions,
exemptions or rebates on tax
CONTRIBUTION TO POLITICAL
PARTIES
Any sum contributed by any company towards
any political party or electoral trust is
deductible.
DONATIONS
Under Sec.80G, if any firm or company donates
to certain funds, charitable institutions such as
national defence funds, Prime Minister’s
National Relief fund, National Children fund
etc . Then amount donated is deductable.
DEVELOPMENT OF SPECIAL
ECONOMIC ZONE
It is in respect of profit and gains by an
undertaking or enterprise (under section 80-
IAB)
Taxpayer can claim 100% deduction for 10
consecutive assessment year out of 15 years
of beginning from year in which these zones
has been notified by central govt.
EMPLOYMENT OF NEW WORKMEN
Section 80JJAA- Conditions required
1) The taxpayer is an Indian company
2) Income includes any profit and gains derived
from any industrial undertaking
3) The industrial undertaking is not formed by
splitting up or reconstruction of an existing
undertaking or amalgamation with other
Amount-
30% of additional wages paid to new regular
workmen employed in the previous year.
Available for 3 assessment years including the
assessment year relevant to previous year.
OFFSHORE BANKING UNITS &
INTERNATIONAL FINANCIAL
SERVICES
A scheduled bank and having an offshore
banking unit in special economic zone
A foreign bank having an offshore banking
unit in special economic zone; or
A unit of International Financial Service
centre
A 100% of income is deductable for 5
consecutive assessment years beginning with
the assessment year relevant to previous
year
OIL COMPANIES
The taxable income of all oil companies which
are engaged in petroleum exploration and
production is taxed favourably and the following
expenses/allowances are deductible:
Infructuous or abortive exploration expenses
incurred in areas surrendered prior to the
commencement of commercial production.
All expenses incurred for drilling or exploration
activities, whether before or after
commencement of commercial production,
including the cost of physical assets used. These
are deductible after the commercial production
The allowances are calculated according to
the agreement reached between the oil
company and the Government.
OIL AND GAS SERVICES
All revenues of non-resident oil service
companies (excluding royalties and technical
service fees), earned in connection with
providing services and facilities (e.g. hire of
plant and machinery) to be used in
extraction or production of mineral oils, are
taxed at a deemed profit.
POWER PROJECTS
Foreign companies engaged in constructing,
erecting, testing or commissioning of plant
and machinery for turnkey power projects
approved by the Government and financed
by an international aid programme are taxed
on a deemed profit.
TAX INCENTIVES
The incentives are most often for direct
investors
Investment in productive activities rather
than investment in financial assets
It is directed to foreign investors on the
grounds that there is insufficient domestic
capital for the desired level of economic
development and that international
investment brings with it modern technology
and management techniques
TYPES OF TAX INCENTIVES
Tax Holidays
Most of the holidays offered in transition
countries have been of short duration, and,
are of little benefit to long-term capital-
intensive projects
The longer the holiday, the higher the
revenue cost
Investment Allowances and Tax Credits
Investment allowances and tax credits are
forms of tax relief that are based on the
value of expenditures on qualifying
investments
A tax credit is used to directly reduce the
amount of taxes to be paid
Tax Rate Reductions
General tax rate reductions can be provided
for income from certain sources or to firms
satisfying certain criteria, for example, to
small firms in manufacturing or agriculture
Timing Differences
Timing differences can arise through either
the acceleration of deductions or the
deferral of the recognition of income
NEW INDUSTRIAL
UNDERTAKING
100% tax exemption on income earned by
new industrial undertakings in power
generation, transmission or distribution,
development of industrial parks and provision
of specified telecommunication services, for
ten years of operations out of a block of
fifteen years.
RESEARCH AND DEVELOPMENT
100% tax holiday for ten years in the case of
any qualifying company carrying on scientific
and industrial research and development.
EXPORTS
100% tax holiday for profits derived from
exports from free trade zones, export
orientated units, electronic hardware and
software technology parks and special
economic zones.
THANK YOU
