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Unit 11: Taxation Planning

undertaking located in a special economic zone commencing activities on or after 1 April 2003, Notes
the tax incentives are available as follows:
First five years – 100%

Next two years – 50%
Last three years – 50% (to the extent amount credited to specified reserve)
In the case of new units located in a Special Economic Zone commencing activities on or after 1
April 2006, the tax incentives available are as follows:
First five years – 100%
Next two years – 50%
Last three years – 50% (to the extent amount credited to specified reserve)

Profits of Industrial undertakings: A tax holiday for a specified number of years is available in
respect of either the entire or part of the profits derived by an industrial undertaking located in
a backward state or district or an industrial undertaking engaged, inter alia, in any of the
following activities:
1. Infrastructure facility

2. Industrial parks
3. Generation or distribution of powers
4. Power transmission
5. Renovation of existing network of power transmission

6. Gas distribution network
7. Hospitals in rural area
8. Hotels and conventions centres in specified area
9. Undertaking establishment in the north eastern state carrying on specified business

10. Undertakings deriving profits from operating and maintaining hospitals in places other
than urban agglomerations.

Task Discuss the benefits of tax holidays for corporate. Make a list of different tax holidays
in India.

Self Assessment

A. State True or False:
6. The securities transaction tax is applicable if equity shares or units of equity oriented
mutual fund are transferred on or after October 1, 2004 in a recognized stock exchange
in India.
7. Every income arising from the transfer of a capital asset being a unit of US 64 is
chargeable to tax where the transfer of such assets takes place on or after April 1,
2002.

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