The Government offers many incentives to investors in India with a view
to stimulating industrial growth and development. The incentives offered
are normally in line with the government's economic philosophy, and are
revised regularly to accommodate new areas of emphasis. The following
are some of the important incentives offered, which significantly reduce
the effective tax rates for the beneficiary companies:
- Five year tax holiday for :
- Power projects.
- Firms engaged in exports. New industries in notified states
and for new industrial units established, in electronic
hardware/software parks.
- Export Oriented Units and units in Free Trade Zones.
- As of 1994-95 budget firms engaged in providing
infrastructure facilities, can also avail of this benefit.
- Tax deductions of of 100 per cent of export profits.
- Deduction of 30 per cent of net (total) income for 10 years for
new industrial undertakings.
- Deduction of 50 per cent on foreign exchange earnings by
construction companies, hotels and on royalty, commission etc.
earned in foreign exchange.
- Deduction in respect of certain inter-corporate dividends to the
extent of dividend declared.
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