Even as the Narendra Modi-led central government looks at measures to support the economy amid a global coronavirus crisis, the Union commerce and ministry could be planning a tax holiday for companies that bring new investments, suggests a Bloomberg report citing unnamed sources.
The finance ministry is said to be evaluating the proposed tax holiday of 10 years, which might apply to companies making more than $500 million worth of new investments. According to Bloomberg, the companies will need to start operations within three years from June 1 and cover sectors like medical devices, electronics, telecom equipment and capital goods to be able to avail of the benefits.
The report also speaks of another plan, where a four-year tax holiday would be given to companies investing upwards of $100 million in labour-intensive sectors like food processing, textiles, leather and footwear.
Additionally, a lower corporation tax is said to be planned for next six years, at the rate of 10 per cent. The finance ministry has yet to take a final decision on this, says the report.