Financial Support
Key Provisions In The 2o15-16 Union Budget:
- SETU (Self Employment and Talent Utilization) to be established as a techno-financial, incubation and facilitation programme to support all aspects of a startup business. INR 10 Billion to be set aside as initial amount in NITI.
- Atal Innovation Mission (AIM) to be established in NITI to provide an Innovation Promotion Platform involving academicians, and drawing upon national and international experiences to foster a culture of innovation, research and development. A sum of INR 1.5 Billion will be earmarked.
- The threshold limit for applicability of transfer pricing regulations to specified domestic transactions increased from INR 0.05 billion to INR 0.2 Billion.
- Service Tax exemption for common effluent treatment plant operators.
- Rate of income tax on royalty and fees for technical services reduced from 25% to 10% to facilitate technology inflow.
- Time limit for taking CENVAT credit on inputs and input services have been increased from six months to one year.
Export Incentives Have Been Envisaged In The Following Schemes:
- Focus product scheme.
- Special focus product scheme.
- Focus market scheme.
- Export promotion capital goods scheme.
Area-Based Incentives:
- Incentives For Units In SEZ/NIMZ As Specified In Respective Acts.
- Setting Up Of Projects In Special Areas Such As The North-East, Jammu & Kashmir, Himachal Pradesh And Uttarakhand.
Units In Clusters:
- A scheme for the development of common facilities like effluent treatment, testing centres etc.
State Incentives:
- Besides the above, each state in India offers additional incentives for industrial projects.
- Incentives are in areas like subsidised land cost, relaxation in stamp duty on sale/lease of land, power tariff incentives, concessional rate of interest on loans, investment subsidies/tax incentives, backward areas subsidies, special incentive packages for mega projects etc.
R&D Benefits:
- Industry/private sponsored research programmes:
- A weighted tax deduction is given under section 35 (2AA) of the Income Tax Act.
- A weighted deduction of 200% is granted to assesses for any sum paid to a national laboratory, university or institute of technology, or specified persons with a specific direction provided that the said sum is used for scientific research within a programme approved by the prescribed authority.
- Companies engaged in manufacture having an in-house R&D centre:
- Weighted tax deduction of 200% under section 35 (2AB) of the Income Tax Act for both capital and revenue expenditure incurred on scientific research and development. Expenditure on land and buildings are not eligible for deduction.
- A national centre to help develop bulk drugs and facilitate their research is being set up in Hyderabad.
- Duty free import of Pharmaceuticals reference standards.