What You Need to Know About the Local Tax Incentives

Tax Incentives in India Tax incentives play a major factor when an investor decides which country he or she wants to set up their business in. In India, these are the local incentives you need to keep in mind.


Tax Incentives for Individuals

If you are an individual in the country, your tax incentives will be claimed from your taxable income. This can be based on either income, expenditure, or investment. Some examples of these include the following:

  • Incentives claimed from tax holiday profits if your business is engaged in the development of SEZ or infrastructure.
  • Incentives claimed from your investments like some mutual funds, life insurance, fixed-deposits by the bank, infrastructure bonds, and more.
  • Incentives claimed from certain payments or expenses like donations, premiums from medical insurance, approved organisations or trusts, and so on.


Tax Incentives for Corporations

With corporate tax incentives in India, there are usually conditions that apply. These conditions will be within a time period that applies. In some cases, you might need to fulfil other conditions too before you qualify.

Here are the tax incentives categories for corporations in India that you may qualify for:

  • Incentives for exports.
  • Incentives for income that is derived from international financial service centres.
  • Incentives for income that relates to banking units offshore.
  • Incentives for any capital expenditure (applicable to only certain specific businesses).
  • Incentives for expenditures related to Research and Development (R&D).
  • Real Estate Investment Trusts (REITs).
  • Infrastructure Investment Trusts (InvITs).
  • Incentives for infrastructure development undertakings.
  • Incentives if your undertaking involves something else other than infrastructure development.
  • Incentives for hiring new workers or workmen.
  • The incentive for the Patent Box Regime.
  • Incentives for the amortisation of the spectrum fee cost of Telecom operators.


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Tax Incentives in India