30 per cent tax sop for industries in Bihar

A 30 per cent income tax rebate will be given to new manufacturing plants and machinery to be set up in 21 'backward' districts of Bihar under a special concession announced by the government ahead of the assembly polls in the state to be held soon.
The Finance Ministry today made public the notification declaring 21 districts including capital Patna that will be entitled to this concession for five years under section 32 of the IT Act from April, 2015 to March, 2020.
The notified districts include Patna, Nalanda, Bhojpur, Rohtas, Kaimur, Gaya, Jehanabad, Aurangabad, Nawada, Vaishali, Sheohar, Samastipur, Darbhanga, Madhubani, Purnea, Katihar, Araria, Jamui, Lakhisarai, Supaul and Muzaffarpur.

"Any manufacturing undertaking or enterprise set up during the period from April, 2015 to March, 2020 in the aforesaid backward areas of Bihar will be eligible for 15 per cent additional depreciation under Section 32(1)(iia) and 15 per cent 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 I-T Act. Thus, a manufacturing undertaking or enterprise set up in any of these areas during the aforesaid period will be eligible for 35 per cent (instead of 20 per cent) of additional depreciation. This would be over and above the normal depreciation of 15 per cent," the CBDT notification said.

It added that besides this, a company engaged in manufacturing will also be eligible for 30 per cent (instead of 15 per cent) of investment allowance if its investment in new plant and machinery during the period April, 2015 to March, 2017 exceeds Rs 25 crore.

The said section 32AD was first "inserted" in the I-T Act in the Finance Bill, 2015 in order to provide incentive and economic boost to the newly bifurcated states of Andhra Pradesh and Telangana.
Already in a major pre-poll sop, Prime Minister Narendra Modi had yesterday announced a Rs 1.25 lakh crore package, promising the state will touch new heights of development if the BJP is voted to power.

Bihar is slated to go to polls in September-October this year.