New Delhi: Ahead of the assembly polls, the Centre has notified 21 districts of Bihar, including capital Patna, as "backward" areas for conferring income tax rebate of 15 per cent on setting up of new manufacturing plants and buildings.
The Central Board of Direct Taxes (CBDT), the apex policy making body of the Income Tax department, has issued a notification in this regard yesterday putting these select districts under section 32 and 32AD of the I-T Act.
Beginning this financial year, the districts, will stand to benefit where entrepreneurs will pay 15 per cent less on income tax on investments in buildings, new plants and machinery in such a notified backward area.
The notified districts include Patna, Nalanda, Bhojpur, Rohtas, Kaimur, Gaya, Jehanabad, Aurangabad, Nawada, Vaishali, Sheohar, Samastipur, Darbhanga, Madhubani, Purnea, Katihar, Araria, Jamui, Lakhisarai, Supaul and Muzaffarpur.
The said section 32AD was first "inserted" in the I-T Act in the Finance Bill, 2015 in order to provide incentive and economic boost to the newly bifurcated states of Andhra Pradesh and Telangana.
"The proposed sub-section (1) of the aforesaid section seeks to provide that where an assesses sets up an undertaking or enterprise for manufacture or production of any article or thing, on or after the 1st day of April, 2015 in any backward area notified by the Central Government in this behalf and acquires and installs any new asset for the purposes of the said undertaking or enterprise during the period beginning on the 1st day of April, 2015 and ending before the 1st day of April, 2020 in the said backward area.
"Then, there shall be allowed a deduction of a sum equal to fifteen per cent of the actual cost of such new asset for the assessment year relevant to the previous year in which such new asset is installed," says the relevant provision.
Similarly, section 32 of the I-T act deals with depreciation of "tangible" assets like buildings, machinery, plant or furniture.
The I-T exemption, according to the CBDT notification, will come into force with the publishing of the order in the official gazette.
In a major pre-poll sop for the state, Prime Minister Narendra Modi today announced package of a whopping Rs 1.25 lakh crore, promising that the state will touch new heights of development if the BJP is voted to power.
The 243-seat Bihar Assembly is slated to go to polls in September-October later this year.