Clear the Air on Tax Holidays

Historically, tax policy in India has been used as an effective tool to channel investments into the desired sectors, by way of tax holidays. Nonetheless, at times the relevant section of the Income Tax Code does not (or is made not to) make a reading consistent with the objective of providing the holiday.  This results in the industry facing surprises in tax assessments leading to protracted litigation. 
 
Given the laudable and purposive objective, the government would do well to clear the air on the key issues faced by the industry in availing the exemptions/deductions, especially after having committed huge capital based thereon. Some such obvious cases have been identified below.
 
Section 80-IA Tax Holiday
 
Modernisation/overhauling of infrastructure facilities
 
With the objective of incentivising the infrastructure sector, Section 80-IA of the Income-tax Act, 1961 (‘the Act’) provides for tax holiday in respect of income arising out of ... [Follow Original Article link for full content.]