Investment allowance, Finance, Other Engineering

Assignment Help:
Investment allowance

Until a few years ago, a company could charge an amount equal to 25 per cent of the original value of an asset as investment allowance in the period in which it was installed for production, and thus, it provided tax shield equal to investment allowance was to encourage investment in fixed assets by the corporate sector. The government withdrew investment allowance form April 1987. It was however reintroduced only in case of the high tech industries in 1988. The rate was 20 per cent. It has also been withdrawn now.

Investment deposit scheme

The government introduced the investment deposit scheme when the investment allowance scheme was withdrawn in 1987. Under this scheme as firm could deposit up to 20 per cent of the profits (before the set off of any unabsorbed business losses of earlier years) with the industrial development bank of India. For this the firm would be entitled to a deduction equal to the amount of deposit and or any new plant and machinery. The scheme has also been withdrawn now.

Other tax incentives

There are number of other tax and non-tax incentives available to a firm when it undertakes a new investment project.

The sales tax deferral is also available to a unit set up in a specific backward area. Sales tax equal to 4 per cent of gross sales collected from customers in allowed to be retained, free of interest, for a period of 7 years. This, the sales tax collected during a year needs to the remitted to the state government only in the 8th year. This concession is available for a period of 6 years from commercial production.

Related Discussions:- Investment allowance, Finance

Swell Factors, The effect of swell factors on volumes

The effect of swell factors on volumes

Propeller terminology, PROPELLER TORQUE Propeller torque is produced by...

PROPELLER TORQUE Propeller torque is produced by the aerodynamic drag on the blades when in motion. Propeller torque acts in the plane of rotation and opposes engine torque.

Importance of capital budgeting decision, The study is conducted to know th...

The study is conducted to know the importance of capital budgeting decision and the techniques to evaluate the investment projects. There are a variety of discounted and non-disco

Communication engineering, I am preparing for a seminar ... but I am search...

I am preparing for a seminar ... but I am searching for a very good topic. Can you help me to get a topic in wireless communication . i want to know what are the latest technologie

Aerodynamics-boundary layers, Approach The Hanley solver does solve for ...

Approach The Hanley solver does solve for the boundary layer and potential flow (in a way we will think about later). However, it only gives us full access to the potential solu

Rayleigh scattering, how rayleigh scattering occurs in optical fiber cable

how rayleigh scattering occurs in optical fiber cable

Power systems, WHY VOLTAGE GENERATED IN MULTIPLES OF 11

WHY VOLTAGE GENERATED IN MULTIPLES OF 11

What is trial balance?, What is Trial Balance?  All business periodicall...

What is Trial Balance?  All business periodically tabulate the charge and credit worthiness stability separately in a declaration to see whether the complete of charge account b

Different types of handover in a gsm network, Question: (a) Cellular sy...

Question: (a) Cellular systems are based on two main types of multiplexing, what are those two types of multiplexing? Explain how they are used to improve channel allocation in

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd