Thursday, March 15, 2007


  • Pass-through status to be granted to venture capital funds only in respect of investments in venture capital undertakings in biotechnology; information technology relating to hardware and software development; nano technology; seed research and development; research and development of new chemical entities in the pharmaceutical sector; dairy industry; poultry industry; and production of bio-fuels, and hotel-cum-convention centers of a certain description and size. Consequently, definition of Venture Capital Undertaking under section 10(23FB) amended to include only such units, which are engaged in the above mentioned activities. 
  • Deduction for Medical Insurance under section 80D raised by Rs. 5000. Payments now can be made by any mode other than Cash.
  • Benefit under section 80IA for infrastructure facilities extended to include
  • Cross country natural gas distribution network, including gas pipeline and storage facilities integrated to the network
  • Navigation Channel in sea
  • A five year income tax holiday for two, three or four star hotels and for convention centres with a seating capacity of not less than 3,000 beginning operations in National Capital Territory of Delhi or in the adjacent districts of Faridabad, Gurgaon, Ghaziabad or Gautam Budh Nagar during April 1, 2007 to March 31, 2010
  • Tax holiday to undertakings in Jammu & Kashmir to be extended for another five years up to March 31, 2012 
  • Weighted average deduction under section 35(2AB) for in house research and development to be extended for five more years until March 31, 2012  
  • Now deduction u/s 80E for interest paid on loan taken for higher studies will be allowed even if such loan is taken for higher studies of spouse and children.
  • Any cash payment in excess of Rs. 20,000/- for any expenditure claimed in the computation of income, will be disallowed in full and treated as income of the assessee. However the CBDT will prescribe the circumstances under which such cash payment can be made and claim as deductible expenses. 


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