Three-star hotels, hospitals to get tax breaks
The finance ministry will soon re-notify the list of infrastructure facilities eligible for tax concessions to include three star hotels and hospitals.
By Subhomoy Bhattacharjee, TNN |
NEW DELHI: The finance ministry will soon re-notify the list of infrastructure facilities eligible for tax concessions to include three star hotels and hospitals.
While hotels and hospitals were eligible for tax breaks as infrastructure, the benefit had got knocked off after the government erased Section 10(23G) from the Income Tax Act this year.
This section, among other things, had specified these and other sectors as eligible for the tax breaks. The ministry will soon issue a notification to re-confirm them along with SEZ developers, as eligible infra sectors under Section 36(1)viii of the Income-Tax Act.
While sub-Section 4 of 80IA defines infrastructure projects that are eligible for tax concessions, Section 10(23G) had included additional categories. These are hotel projects-for constructing a hotel of not less than three-star category as classified by the central government - and hospital projects, with at least one hundred beds for patients.
Till now, no applications has run into problems about the tax rebate because of this lacunae. But government officials said the a fresh tax rebate could face problem unless the anomaly is rectified. Section 10(23G) provided tax exemption to financial institutions for investments in approved infrastructure projects. The tax break was given to ensure low-cost capital for thrust area projects during the era of high interest and tax rates. But the macro-economic scenario has since changed, and the government withdrew the concession.
Section 80IA defines, among other things, the list of eligible infrastructure projects like road, highway, bridge, airport, port, rail system or any other public facility of a similar nature as may be notified by the CBDT. The list also includes projects like water supply, irrigation, sanitation and sewerage systems, generation and distribution of electricity or any other form of power and telecommunication services.
While hotels and hospitals were eligible for tax breaks as infrastructure, the benefit had got knocked off after the government erased Section 10(23G) from the Income Tax Act this year.
This section, among other things, had specified these and other sectors as eligible for the tax breaks. The ministry will soon issue a notification to re-confirm them along with SEZ developers, as eligible infra sectors under Section 36(1)viii of the Income-Tax Act.
While sub-Section 4 of 80IA defines infrastructure projects that are eligible for tax concessions, Section 10(23G) had included additional categories. These are hotel projects-for constructing a hotel of not less than three-star category as classified by the central government - and hospital projects, with at least one hundred beds for patients.
Till now, no applications has run into problems about the tax rebate because of this lacunae. But government officials said the a fresh tax rebate could face problem unless the anomaly is rectified. Section 10(23G) provided tax exemption to financial institutions for investments in approved infrastructure projects. The tax break was given to ensure low-cost capital for thrust area projects during the era of high interest and tax rates. But the macro-economic scenario has since changed, and the government withdrew the concession.
Section 80IA defines, among other things, the list of eligible infrastructure projects like road, highway, bridge, airport, port, rail system or any other public facility of a similar nature as may be notified by the CBDT. The list also includes projects like water supply, irrigation, sanitation and sewerage systems, generation and distribution of electricity or any other form of power and telecommunication services.
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