Ministry okays capital gains tax exemption for SMEs but with rider

Small and Medium Enterprises (SMEs) will soon be able to dispose of assets, such as ancestral property, without attracting a capital gains tax, provided they invest the proceeds into their business.

The Finance Ministry has given an ‘in principle' approval to this proposal, said Mr R.P. Singh, Secretary, Department of Industrial Policy and Promotion (DIPP).

This proposal was a part of the new manufacturing policy released by the Government recently.

“This ‘in principle' nod to the proposal would go a long way in enabling a large number of entrepreneurs to raise equity by selling ancestral properties and raise their level of investments and employment,” he said.

Aimed at reducing the Government's role in the affairs of business, DIPP had given its approval to third party audit, to promote self regulation to the extent possible.

Mr Singh, added that the Labour Department had certain reservations to the idea, citing ILO regulations as benchmarks and sovereign functions as being paramount.

“These are not sovereign functions, but are statutory functions of the Government,” he said.

The DIPP Secretary expressed hope that the demand for fiscal benefits for skill upgradation by treating it on par with R&D will be acceded to by the Finance Ministry. The policy aims to give 150 per cent weighted deduction on investments in skill upgradation.

He said that the exit mechanism proposed seeks to decouple the disposal of assets from labour dues, a concept that has found favour with the Ministry of Corporate Affairs.

Full protection would, however, be given to the employees of such units through an appropriate insurance instrument and/or a sinking fund.

Mr Singh urged industry to have an independent dialogue with the Labour Ministry on issues of concern such as contract labour.

 He said that Government implementation of liberalisation policy has been sub-optimal so far and the new manufacturing policy aims to finish the agenda of the 1991 reforms.


Share this:

About Jessica Priston

Ut tellus dolor, dapibus eget, elementum vel, cursus eleifend, elit. Aenean auctor wisi et urna. Aliquam erat volutpat. Duis ac turpis. Integer rutrum ante eu lacus. Vestibulum libero nisl, porta vel, scelerisque eget, malesuada at, neque. Vivamus eget nibh. Etiam cursus leo vel metus. Nulla facilisi. Aenean nec eros.

  • Website
  • Google+
  • Rss
  • Pinterest
  • Instagram
  • LinkedIn
  • Vimeo
  • Youtube
  • Flickr
  • Email

Related News

  • Cashback site Cashkaro now offers restaurant discounts

    India’s e-commerce market looks large and lucrative enough from the outside, but insiders know it is very challenging. In fact, the number of e-commerce sites and businesses is growing so fast here today that the competition is cut-throat. This

  • What is Viscose Material? Advantage and disadvantage of viscose.

    Viscose is a unique form of wood cellulose acetate used in the nnmanufacture of a number of different products. This includes items for nnthe medical industry, though it is perhaps most common as a major nningredient in the production of the fabric r

  • Honda launches new CBR 250R bike
    Honda launches new CBR 250R bike
    July 01, 2014 5:50 am

    New Delhi: Honda Motorcycle & Scooter India (HMSI) launched a new edition of its global sports performance bike CBR 250R priced between Rs 1.56 lakh and Rs 1.86 lakh (ex-showroom Delhi). The 2013 edition CBR 250R is available for sale across a

  • Zara has opened store at Ambience mall, Gurgaon

    Zara, has opened its new store at Ambience mall, Gurgaon. Spread over 28,000 sq.ft. across two floors the store has taken the space earlier occupied by Debenhams. With this Zara now has twelve stores in India. It is present in 86 countries with