By TIOL News Service

NEW DELHI, FEB 04, 2014: BEING committed to cushion developmental efforts of the bifurcated States of AP and Telangana, the Union Government today announced a few tax sops and more proposals are being discussed. This is in addition to a sum of Rs 500 Crore sanctioned for backward districts.

As per the Government Press Release, the following tax incentives have been provided for:

i. The manufacturing industries set up in the backward region, as notified, would be given 15% additional depreciation on new plant and machinery in the first year of installation.

ii. An additional investment allowance of 15% would be given to industries set up in the backward regions, as notified, for investments made in new plant and machinery in any of the 5 years for which additional concession would be notified. Even if the investment is made in the 5th year, the investment allowance would be available.

iii. The additional depreciation allowance, and investment allowance will be provided without insisting on an investment of above Rs. 25 crore.

It has now been decided that funds amounting to Rs.350 crore (@ Rs.50 crore per District) in seven Backward Districts of Andhra Pradesh may be provided to Government of Andhra Pradesh during 2014-15 for its development activities.

Besides, an inter-ministerial Joint Committee, constituted by Ministry of Home Affairs, is also taking stock of the situation of Government of Andhra Pradesh to make recommendations to bridge the likely resource gap in the Central Budget 2014-15. However, an adhoc support of Rs. 500 crore for current financial year will be provided to Andhra Pradesh, pending recommendations of the Committee.