NET ZERO IMPORTS
China
Software Companies |
1 . |
Income earned up to 5 million Yuan from technological transfer in a tax year is exempted from the EIT . |
2 . Income earned over and above 5 |
million Yuan is taxed @ 50 % EIT . |
3 . Business tax exemption is available for |
eligible technology transfer . |
Special Economic Zones / Export Oriented Policies
India
1 . No such specific singularised schemes are available in the Indian software sector .
1 . 100 % tax exemption on profits earned form export for first 5 years , 50 % for the following 5 years and 50 % of ploughed back profit from export for the next 5 years .
2 . Exemption from MAT .
3 . External commercial borrowings by unit ’ s $ 500 million in a year without any restriction of maturity through recognised bank channels .
4 . Exemption from central sales tax and service tax .
5 . Single window clearance for Central and state level approvals .
Carry Forward of R & D Losses
1 . Tax losses attributable to R & D super deduction can be carried forward for 5 years .
1 . Unused benefits can be carried forward for 8 years in case the taxpayer is in a loss .
Manufacturing Policy :
Initiatives for strategic industries
China
Chinese authorities have announced highend equipment manufacturing , biotechnology and next generation information technology as strategic emerging industries along with certain other sectors . These sectors are provided incentives and preferential policies across the spectrum .
1 . Torch Programme :
a . Approved by the State Council in 1988 , this initiative was aimed at building high-end industrial manufacturing zones .
b . As a result , 105 new industrial manufacturing zones were established in China by 2012 realizing an annual turnover of 5.22 trillion Yuan .
2 . Innofund ( Innovation fund for small and medium technology based firms ) aimed at providing three forms of financing , namely , appropriation , bank loan interest subsidies , and equity investment .
i ) Appropriation is provided to startups as capital for small firms founded by research personnel with their own scientific innovation , even though the
India
Large number of industries has been identified as strategic by the Government , including IT and electronic hardware industry , etc . Each of the strategic industries has received specific government policy intervention .
1 . Electronic Manufacturing Cluster ( EMC ) Scheme
a . The EMC Scheme supports creation of world-class infrastructure for attracting investments in the Electronics Systems Design and Manufacturing Sector .
b . The scheme supports grant assistance for setting up of both greenfield and brownfield EMCs .
c . The financial assistance under the scheme is in the form of grants-in-aid only .
d . For greenfield EMCs , the assistance is 50 % of the project cost subject to a ceiling of
e . Rs . 50 crore for every 100 acres of land , and for brownfield EMCs the assistance is upto 75 % of the project cost subject to a ceiling of Rs . 50 crores .
2 . The preference for domestically manufactured electronics goods policy
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