15 Percent Investment Allowance Provided on Investment of More than 100 Crores in Plant and Machinery Concessional Rate of Tax of 15 Percent on Dividend Received from its Foreign Subsidiary by a Company Continued for One More Year

The Finance Bill 2013-14 proposes an investment allowance at the rate of 15 per cent to a manufacturing company that invests more than Rs.100 crore in plant and machinery during the period 1.4.2013-31.3.2015. Presenting the Union Budget in the Lok Sabha today, the Finance Minister Shri P.Chidambaram said that no large economy can become truly developed without a robust manufacturing sector. He also propsed to extend the ‘Eligible Date’ for projects in the power sector to avail of the benefit under Section 80-IA of the Income Tax Act from 31.3.2013 to 31.3.2014.

Mr. Chidambaram also announced that the concessional rate of tax of 15 per cent on dividend received by an Indian company from its foreign subsidiary shall be continued for one more year. This will encourage repatriation of funds from overseas companies . Further, the Indian company shall not be liable to pay dividend distribution tax on the distribution to its shareholders of that portion of the income received from its foreign subsidiary.

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DSM/RC/nb/22

(Release ID :92738)