Bihar Government announced 30 per cent income tax rebate to new manufacturing plants and machinery to be set up in 21 ‘backward’ districts of Bihar for five years under section 32 of the IT Act from April, 2015 to March, 2020.
Under Section 32(1) (iia) of the Income Tax Act,
Any manufacturing undertaking or enterprise set up during the period from April, 2015 to March, 2020 in the aforesaid backward areas of Bihar will be eligible for 15 per cent additional depreciation.
Under Section 32AD of the Income Tax Act,
- 15 per cent investment allowance on the cost of plant and machinery acquired and installed by it during the said period.
- 32AD was first “inserted” in the I-T Act in the Finance Bill, 2015 in order to provide incentive and economic boost to the newly bifurcated states of Andhra Pradesh and Telangana.
- The notified 21 districts include Patna, Nalanda, Bhojpur, Rohtas, Kaimur, Gaya, Jehanabad, Aurangabad, Nawada, Vaishali, Sheohar, Samastipur, Darbhanga, Madhubani, Purnea, Katihar, Araria, Jamui, Lakhisarai, Supaul and Muzaffarpur.
- It added that besides this, a company engaged in manufacturing will also be eligible for 30 per cent (instead of 15 per cent) of investment allowance if its investment in new plant and machinery during the period April, 2015 to March, 2017 exceeds Rs 25 crore.