INCENTIVES TO TOURISM INDUSTRY
IN order to boost the flow of tourists
in the country, the Government in its Budget proposals for 2002-2003
has announced the following tax concessions :
- Exemption of Air Travel Tax on air travel
from and to North East.
- Service tax exemption given earlier to be
extended for one more year. In cases of functions and banquets
where the entire bill is for catering services, no service tax
would be charged.
- Expenditure Tax on hotels henceforth to
apply only to room charges.
- Threshold of Rs. 2000 raised to Rs. 3000
for levy of Expenditure Tax.
- Disparities between 80 HHC and 80 HHD of
the Income Tax Act removed (Under Section 80 HHC the exemption
is for 100 per cent of the total foreign exchange earnings.
But for hotels, under section 80 HHD it was 50 per cent and
the balance 50 per cent was exempted if it was kept in a reserve
and used for specified purposes), Now this disparity stands
removed.
- Deduction of 50 per cent of profits earned
by units setting up convention centres will be allowed for 5
years under section 80 IB of the Income Tax Act.
- TDS under section 194 H of the Income Tax
Act reduced from 10 per cent to 5 per cent.
This information was given by the
Minister of Tourism and Culture Shri Jagmohan in a written reply
to Shri P. Prabhakar Reddy in the Rajya Sabha here today.
