Wed. Sep 23rd, 2020

21 districts of Bihar notified as ‘backward areas’ to provide them additional tax benefits for faster growth

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The Finance Act, 2015 amended the
provisions of the Income-Tax Act, 1961 to provide certain tax benefits to
notified backward areas in specified States including State of Bihar to give these
backward areas an opportunity to grow faster.

On 17.08.2015, 21 districts of Bihar have been notified as backward areas vide Notification
No. S.O. 2241(E) to give effect to the amendment. These includes Patna,      Nalanda, Bhojpur, Rohtas, Kaimur, Gaya,
Jehanabad, Aurangabad, Nawada, Vaishali,     
Sheohar, Samastipur, Darbhanga, Madhubani, Purnea, Katihar, Araria, Jamui,     Lakhisarai, Supaul and Muzaffarpur.

According to the said notification,
any manufacturing undertaking or enterprise set-up during the period from
01.04.2015 to 31.03.2020 in the aforesaid backward areas of Bihar will be
eligible for 15% additional depreciation under Section 32(1)(iia) and 15%  investment allowance under Section 32AD of
the Income-tax Act, on the cost of plant and machinery acquired and installed
by it during the said period. The aforesaid incentives are in addition to other
tax benefits available under the Income-tax Act.

Besides, a company engaged in
manufacturing will also be eligible for 30% (instead of 15%) of investment
allowance if its investment in new plant and machinery during the period 01.04.2015
to 31.03.2017 exceeds Rs.25 crore.

 

-Ministry of Finance
Source: Legal news India

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