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 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.
Special incentives
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.
