Industry watch

Industry watch

Industrial Park Scheme in India

The Industrial Park Scheme was introduced by the Government of India in 1997 to give impetus to the infrastructure sector. The scheme was revised in 2002 and was valid up to March 2006. A Draft Industrial Park Scheme was prepared in 2006. And the new scheme was finally introduced this year.

The scheme extends 100 per cent tax holiday on profits derived by an undertaking from the activity of developing, developing and operating, or maintaining and operating an Industrial Park and is applicable to all Industrial Parks set up between April 1, 2006 and March 31, 2009.

The objective of providing a tax holiday is to promote and incentivise capital investment. The industrial units set up under the new scheme can undertake certain specified manufacturing activities.

To gain the tax benefits, a developer essentially needs to comply with certain conditions, such as minimum requirement of 30 units, all units of same group would be considered as a single unit, a single unit cannot occupy more than 25 per cent of total area, minimum area of 50,000 sq mt needs to be developed, etc.