Dear Sir

we have completed tax holiday period at our location, we are in plastic polythelen film bag manufacturer. Now we are going to expand our business by buying new Ci printing machine at our factory cost arount Euro 14,75,000.00 in fy. 2012-13 with bank loan, if we start commercial production in same financial year than what income tax benefit we can get. We will have to pay advance tax or not. please reply.

Admin’s Response:

It all depends on the case and section under which the tax holiday was applicable on you. If the holiday period is over, you would be required to pay tax as usual unless the provisions of the Section permit you further exemptions based upon your installing of new Plant and Machines. However, you can claim depreciation on the new plant and machinery and also interest on loan from your profits. In case of insufficiency of profits, the business loss can be carried forward to set off against future profits for a period of eight years.