Budget 2016: Govt announces 0.5 per cent Krishi Kalyan Cess to fund farm programmes

Union Budget 2016

He said the cess would come into force with effect from June 1, 2016. “Input tax credit of this cess will be available for payment of this cess,” he added.

Jaitley also proposed to amend section 35AD of the Income-tax Act so as to reduce the deduction from 150 per cent
to 100 per cent in the case of a cold chain facility, warehousing facility for storage of agricultural produce, production of fertiliser among others effective from April 1.

For expenditure on agricultural extensions project, he proposed to amend section 35CCC of the Income-tax Act to restrict the deduction to 100 per cent from financial year 2017-18 (Assessment Year 2018-19).

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To encourage cold storage facilities in the farm sector, Jaitley exempted service tax on all facilities provided by the state-run National Centre for Cold Chain Development effective from April 1. At present, the service tax rate is 14 per cent.