To give a boost to the housing sector interest deductible under income tax up to Rs 1,50,000, for construction or purchase of a self-occupied house property will continue.
In addition, it is proposed that income from housing projects for construction of residential units, of prescribed specification, approved by the local authorities up to March 31, 2005, will now be exempt from income tax.
Further the ministry is examining additional incentives for slum upgradation, sewerage system laying and greenfield housing projects.
Package for powerlooms
A Powerloom Package for Modernisation in order to give a fillip to powerlooms is in the pipeline. Under the package, the Technology Up-gradation Fund Scheme will be enlarged to cover modernisation of power-looms.
Also, to obtain higher productivity, a new Powerloom Workshed Scheme will be introduced by the ministry of textiles together with the state governments.
Improvement of other infrastructure of existing powerloom clusters will be taken up under the revised Textile Sector Infrastructure Development Scheme. All powerloom workers will be covered under the Special Insurance Scheme, which will provide them insurance cover against death, accident and disability.
Preventing textile sickness
Recognising the need to prevent sickness in the textile industry, the Government is considering a mechanism for restructuring the debt portfolios of viable and potentially viable textile units.
Concessions in IT
Concessions extended to Information and Technology sector under Sections 10A and 10B of the Income Tax Act will continue as originally envisaged.
Also the restrictions that the benefit of such tax exemptions will not remain in case of amalgamation or de-merger has been removed. Value of pre-loaded software has been excluded for the purpose of charging excise duty on computers.
Incentivising tourism Expenditure tax has been withdrawn from the tourism sector. Benefit of Section 10(23G) has been extended to financial institutions that advance long-term capital to hotels in three-star and above categories.
Also, the benefit of set-off of unabsorbed loss and depreciation on amalgamation will henceforth be available to hotels under Section 72A of the Income Tax Act.
The exemption for the hotel industry from the levy of service tax will continue. The basic customs duty on imported equipment for ropeway projects has been reduced to 5 per cent without payment of CVD and SAD.
Encouraging gems and jewellery exports
In order to nurture the gems and jewellery industry, customs duty on rough, coloured gem stones currently at 5 per cent, and on semi-processed, half-cut or broken diamonds which is at 15 per cent, is being removed. Customs duty on cut and polished diamonds and gem stones will also be reduced from the present 15 per cent to 5 per cent.
Comprehensive package for sugar industry
The ministry of food and the finance ministry are preparing a comprehensive scheme to address the problems faced by the sugar industry.
Factory stocks have been accumulating, with growing arrears of payment for cane supplied by farmers. To provide relief to farmers and industry, the Reserve Bank of India has already issued instructions to cooperative banks for converting shortfall in margins into medium-term working capital loans.
Of course, this will depend on furnishing adequate security or state government guarantees. The RBI has also issued instructions to extend the repayment period of medium-term loans to nine years.
Sops for hospital infrastructure
In order to encourage private hospitals to either establish new infrastructure or to expanding the existing medical facilities, it is proposed to extend the benefit of Section 10(23 G) of IT Act to such financial institutions as provide long-term capital to private hospitals with 100 beds or more.
Also, to encourage upgradation of life saving medical equipment the rate of depreciation is being increased from 25% to 40 per cent.
Duty on life-saving equipment reduced
Customs duty on specified life saving equipment is being brought down from 25 per cent to 5 per cent. All drugs and materials imported or produced domestically for clinical trials will be exempt from customs and excise duties.
No duty on life-saving drugs
Life saving drugs currently attracting 5 per cent customs duty will be exempt from excise duty. Basic customs duty on glucometers and glucometer strips used by diabetics, will be reduced from 10 per cent to 5 per cent; and they will be exempt from excise duty as well. Cyclosporine will be exempted from excise duty.
Excise duty on nictotine gum lowered
To assist citizens with impaired vision, the basic customs and excise duties on rough ophthalmic blanks is being reduced from 25 to 5 per cent, and from 16 to 8 per cent, respectively.
To help people give up their addiction to tobacco and its products, excise duty on Nicotin Polacrilex gum shall be reduced from 16 to 8 per cent.
Benefits for power projects
Liberalisation of the mega power project policy (in which 18 projects were identified) further by extending all the benefits offered under it to any other power project provided it fulfill the same conditions.
To encourage greater research in alternative energy, the government has allocated Rs 20 crore to the Council of Scientific and Industrial Research (CSIR) for launching incentive-driven research in solar energy, wind turbine and hydrogen fuel.
Power transmission equipment duties fall
In view of the importance of transmission in the power sector, the government has proposed to reduce customs duty on specific equipment for high voltage transmission projects from 25 per cent to 5 per cent. Rs 500 crore fund for planters Price instability in international markets has had an adverse impact on plantation crops.
So to provide income stability for small growers, the government has announced a price stabilisation fund of Rs 500 crore for tea, coffee, and natural rubber growers. It will become operational in 2003-04.
However, the excise duty of Rs 1 per kg on tea will be replaced by a cess of the same amount to create a separate fund for developing, modernising and rehabilitating the tea plantation sector.
Booster dose for hotels, tourism
To provide a set of incentives to the hotels, tourism industries, the following proposals will be implemented: withdraw the expenditure tax; extend the benefit of Section 10 (23G) to financial institutions that advance long-term capital to hotels in three-star and above categories; the benefit of set-off of unabsorbed loss and depreciation on amalgamation will henceforth be available to hotels under Section 72A of the Income Tax Act; continue the exemption for the hotel industry from the levy of service tax; and reduce basic customs duty on imported equipment for ropeway projects to 5 per cent without payment of CVD and SAD.
Sheen added to jewellery exporters
Customs duty on rough, coloured gem stones is reduced from 5 per cent, and on semi-processed, half-cut or broken diamonds from 15 per cent to nil. Customs duty on cut and polished diamonds and gem stones will also be reduced from the present 15 per cent to 5 per cent.
No withdrawal of benefits under Sections 10A and 10B of the IT Act for gems and jewellery exporters. Instead, it is also proposed to extend the benefits under Sections 10A and 10B of the Income Tax Act to these activities.
