With a view to encourage power generation and reduce transmission and distribution losses Finance Minister Pranab Mukherjee today extended the tax holiday for the power sector by one more year till March 31, 2012. The extension of tax break is part of the government’s efforts to scale up the country’s power generation capacity to meet the growing needs.
Unveiling the Budget for 2011-12, Mukherjee said tax holiday for power sector would be extended till March 31,2012.
The power sector is entitled to tax exemption, under section 80-IA of the Income Tax Act, which ends this fiscal.
The tax exemption would benefit projects that are expected to take off in the remaining time of the 11th Five Year Plan (2007-12), including Ultra Mega Power Projects.
During this Plan period, the capacity addition was envisaged at 78,700 MW and was later revised to 62,374 MW.