Tax concessions to North East tourism sector

 MINISTER of Tourism and Culture Jagmohan said that in order to boost the flow of tourists in the North-East and other parts of the country, the Central Government in its budget proposals for 2002-03 has announced the following tax concessions: Exemption of air travel tax from and to North-East. Service tax exemption given earlier to be extended for one more year. In cases of functions and banquets where the entire bill is for catering services, no service tax would be charged. Expenditure tax on hotels henceforth to apply only to room charges. Threshold of Rs 2000 raised to Rs 3000 for levy of expenditure tax.

 Disparities between 80 HHC and 80 HHD of the Income Tax Act removed (under Section 80 HHC the exemption is for 100 per cent of the total foreign exchange earnings. But for hotels, under Section 80 HHD it was 50 per cent and the balance 50 per cent was exempted if it was kept in a reserve and used for specified purposes). Now this disparity stands removed.

Deduction of 50 per cent of profits earned by units setting up convention centres will be allowed for five years under Section 80 IB of the Income Tax Act. TDS under Section 194 H of the Income Tax Act reduced from 10 per cent to five per cent.
    
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