Mumbai as International Financial Centre

A letter dated 10.2.2011 was recently received in the Finance Ministry from the Deputy Chief Minister of Maharashtra making the following suggestions:

1. In the city of Mumbai “Financial Services Providing Establishments” as codified by WTO/ DIPP be included as one of the eligible activities in the Government of India’s Industrial Park Scheme 2008.
2. The developers of such Industrial parks in Mumbai as also the Financial Services Providing Establishments operating therein should be extended the fiscal benefits available under the ‘Industrial Park Scheme 2008’.
3. Considering the needs to attract investments in Industrial Parks, the sunset clause of Section 80-IA should  be extended for all Industrial Parks coming into operation until March 31, 2014. 

          As a matter of policy, it has been decided not to extend the scope, area of operation or the sunset date of any profit-linked incentive, like the one available under section 80-IA(4)(iii) of the Income Tax Act, 1961 for manufacturing activities in industrial parks.  Profit-linked tax incentives are gradually being phased out from the direct taxes legislations.  This policy is further reflected in the Direct Taxes Code, 2010 Bill introduced in Parliament in August, 2010.  The sunset clause for industrial parks under section 80-IA(4)(iii) was extended vide the Finance (No. 2) Act, 2009 from 31.3.2009 to 31.3.2011 for the last time and it has been decided not to give any further extension to the aforesaid deduction.

       This information was given by the Minister of State for Finance, Shri Namo Narain Meena in written reply to a question raised in Rajya Sabha today.