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Concessions for industries

What are the other amendments made by Finance Act, 2007?

Apart from the changes regarding ESOP scheme and the valuation of housing perquisite for employees, there are other amendments too.

Most of them are concessions for some industries. The concession under Sec. 10(23FB) meant for venture capital funds would now stand extended to developing or operating and maintaining or developing, operating and maintaining any infrastructure facility as defined under Explanation to Sec. 80IA(4)(i). The participants in such venture capital funds would, however, continue to be assessable.

Deduction of reserves for non-performing assets under Sec. 36(1)(viii) is now extended for those in the business of providing long term finance in India for "construction or purchase of houses in India for residential purposes".

Merger and demerger of co-operative banks will not occasion liability for capital gains. Depreciation and allowances under Sections 35D, 35DD and 35DDA, if any, will be apportioned proportionately between the co-operative banks subject to merger or demerger. A new Sec. 72AB has been inserted to permit unavailed unabsorbed loss and unabsorbed depreciation of the amalgamating or demerged co-operative banks to be availed by amalgamated or resultant company subject to conditions.

Sec. 80C has been amended to include among the eligible investments specified bonds issued by National Bank for Agriculture and Rural Development.

Sec. 80IC is substituted by Sec. 80IE for new industrial undertakings and for substantial expansion of existing industries manufacturing eligible articles or things in North Eastern States for ten consecutive years from the commencement of production. This concession will apply for any industry, which begins production from April 1, 2007 to April 1, 2017.

S. Rajaratnam

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