IT Amendment Bill passed in LS

NEW DELHI, Dec 22: The Lok Sabha unanimously passed the Income Tax Second Amendment Bill and the Customs Amendment Bill on Tuesday.Wh...

NEW DELHI, Dec 22: The Lok Sabha unanimously passed the Income Tax Second Amendment Bill and the Customs Amendment Bill on Tuesday.

While the IT amendment bill seeks to extend and clarify certain fiscal incentives and to remove some anomalies in certain sections of the IT Act, the Customs bill seeks to expedite the process of payment of drawback for exporters and realisation of revenue.

The IT Act amendments seek to allow for investments made in infrastructure sector projects prior to June 1 eligible for tax concessions under section 10 23G, extend tax holiday to industrial undertakings in free trade zones and software technology parks to ten years and to restrict the deduction of profits earned by cooperatives engaged in the marketing of agricultural produces grown by its members.

Clause 3 seeks to amend section 10 A of the IT Act. Under the existing provisions, tax holiday is available to newly established undertakings set up in free trade zones and to units set up in software technology parksfor five years, out of the block of initial eight years, subject to fulfilment of certain conditions.

The proposed amendment seeks to extend the period of tax holiday from five to 10 years to give added thrust to exports. Clause 4 similarly extends the five year tax holiday period to 10 years to the export-oriented units under Section 10 B of the Act.

Clause 5 seeks to amend section 32. With a view to removing sluggishness in the commercial vehicles sector, the amendment provides that depreciation on commercial vehicles acquired by the assessee on or after October 1,1998 but before April1,1999 and put to use before April 1,1999 for the purpose of business, shall be allowed at full percentage prescribed for such assets, irrespective of the period of user of the assets during the relevant year.

The amendments in the Customs Act provide for payment of interest by the government for delayed reimbursement to exporters under the drawback scheme.