- With effect from 1st April 2000, deduction in respect of profits and gains for new SSIs is available under Sec. 80IB. The deduction allowed is 25% of profits for 10 years. For units in the NE & specified backward States, the deduction allowed is 100% for first five years & 25% for the next five years. To avail deduction under Sec. 80IB the SSI unit should commence production between 1st April 1995 and 31st March 2002.
- State Governments offer incentives to SSIs in respect of Sales Tax. Some give a tax holiday for periods ranging from 5 to 10 years while others offer deferment of tax.
TAX HOLIDAY SCHEME
- In the Union Budget for 1993-94 a five year tax holiday has been granted for new industrial undertakings located in all of the North Eastern States, Jammu & Kashmir, Himachal Pradesh, Sikkim, Goa and U.T. of Andaman and Nicobar Islands, Dadar and Nagar Haveli, Daman and Diu, Lakshadweep and Pondicherry.
- This has now been extended to backward districts (list enclosed herewith) from the year 1994-95.