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India To Give Investors CGT Break

by Mary Swire, Tax-News.com, Hong Kong

25 July 2011


Rajinder Pal Singh, Secretary of the Indian Department of Industrial Policy and Promotion (DIPP), announced this week that the national manufacturing policy proposal to grant exemption to Small and Medium Enterprises (SMEs) from capital gains tax has been approved “in principle” by the Revenue Department of the Finance Ministry.

Mr Singh was addressing a meeting on National Manufacturing Policy organized by the Federation of Indian Chambers of Commerce and Industry (FICCI). He said that one of the key proposals in the manufacturing policy to improve access to finance for SMEs was the exemption from capital gains for investment into an enterprise, as is done in the case of investment into a residential property, under Sections 54 and 54(F) of the Income Tax Act.

It is thought that the “in principle” nod to the proposal by the Revenue Department will go a long way in enabling would-be entrepreneurs to raise equity by selling property they may own and so providing investment for any proposed new business.

TAGS: capital gains tax (CGT) | tax | investment | business | India | entrepreneurs | manufacturing | tax breaks

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