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Fresh concessions proposed in the bill

What are the concessions, which are newly proposed?

Sub-section (10BC) in Sec. 10 will exempt compensation received for loss or damage caused by disaster as defined under Disaster Management Act, 2005 retrospectively. Exemptions have been given for named institutions under Sec. 10(23BBB), 10(23BBG), 10(23EC) and 10(23FB).

The concession for weighted deduction at 150 per cent of R&D expenses under Sec. 35(2AB) will be extended for five more years up to March 31, 2012.

The benefit of deduction for provision of bad and doubtful debts and reserves under Sec. 36(1)(viia) and 36(1)(viii) is now made available for co-operative banks, which were denied benefit under Sec. 80P in consequence of withdrawal of relief for them from AY 2007-08.

Co-operative banks are also permitted now to receive NR(E) deposits, the interest from which is tax free.

Sec. 72A, permitting carry forward of unabsorbed losses and depreciation of amalgamating company for set off against profits of amalgamated company hitherto confined to manufacturing companies, will now be extended to mergers of shipping, hotel, banking and airlines companies.

The benefit of Sec. 80CCD will be extended to private sector employees in respect of pension fund contributions.

The benefit of Sec. 80IA is now extended for activity of laying down and operation of a cross country natural gas distribution net work. The benefit meant for inland port is extended to navigation channel in the sea.

The extension of relief under Sec. 80IA has also been granted for companies engaged in reconstruction or revival of power generating plant by one year up to March 31, 2008.

The benefit for industries in Jammu and Kashmir under Sec. 80IB is extended by five more years up to March 31, 2012. A new Sec. 80ID has been inserted for conferring to specified persons the benefit of deduction for establishing convention centres or hotels situated in specified areas in and around Delhi — Faridabad, Gurgaon, Gautam Budh Nagar and Ghaziabad.

So much for the much heralded exemption-free tax regime in pre-budget speeches!

If there had been any objective criteria or policy either for introduction of new concessions for some or for withdrawal of existing ones for others, they are not decipherable. Revenue considerations or lobbyist pressures would probably better explain them.

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Fresh concessions proposed in the bill
Tax reliefs, which will be withdrawn
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