Budget briefs

The Indian Express

The Financial Express

Budget briefs

15-year tax brakes for infrastructure units

Power blues

T&D activities, set up after April 1, 1999 will enjoy the infrastructure status as available to generation projects.

Customs duty on generation projects rationalised from 22 to 5 per cent and the countervailing duty increased from 0 per cent to 16 per cent. Net effect is a 1 per cent reduction in the overall duty structure for generation projects.

Customs duty on power transmission projects above 65 KV has been increased to 25 per cent from 22 per cent and the CVD from 10 to 16 per cent. Net effect will be a 9 per cent increase in the overall duty structure for transmission projects.

Mega power projects will be exempt from this basic customs duty of 5 per cent duty and will enjoy the zero per cent import duty benefits.

Road development

Half of the additional duty of Re 1 per litre on high speed diesel (HSD) will be converted into statutory cess to be transferred to the Central Road Fund(CRF).

Out of this 30 per cent (about Rs 760 crore) will go to the states for development of roads and Rs 1,200 crore for development of national highways and expressways and for construction of over-bridges and safety works undertaken at unmanned crossings by the Ministry of Railways.

Rupee 1 per litre duty was levied last year which also will go to CRF. But this is far below Rs 30,000 crore needed for highways alone in the next few years.

Housing sops

Package of fiscal incentives focussed at middle class, middle income housing projects and housing finance companies

Interest on a loan for a self-occupied residential houses will be exempted from tax up to a ceiling of Rs 75,000. The ceiling of deduction presently stands at Rs 30,000. The amendment will take effect from April 1, 2000 and accordingly apply to assessment year 2000 to 2001 and subsequent years.

Ceiling on built-up areas for availing tax holiday under section 801A of the Income-Tax Act for dwelling unitsraised from 1,000 square feet to 1,500 square feet except in Mumbai and Delhi. This is intended to boost construction activity in smaller towns.

Tax on interest on housing loans will be on actual rather than accrual basis with a view of improving the viability of housing finance companies. Liberal tax treatment of income earned on non-performing assets is also proposed.

Business houses can avail of 40 per cent depreciation rate from earlier 20 per cent on dwelling units purchased for its employees.

Shipping Funds will be allocated for techno-economic feasibility study of Sethusamudram Ship Canal Project which will provide a shorter sea route between the eastern and the western ports.

Rural infrastructure

Funds will be left at the disposal of gram panchayats to create rural infrastructure.

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