SMEs to get exemption from capital gains tax

NEW DELHI, INDIA: The national manufacturing policy proposal to grant exemption to Small and Medium Enterprises (SMEs) from capital gains tax has ‘in principle’ been approved by the Revenue Department of the Finance Ministry.

Addressing an interactive meeting on ‘National Manufacturing Policy’ organized by the FICCI, R P Singh, secretary, Department of Industrial Policy and Promotion (DIPP), on Wednesday said the policy is aimed at reducing the intrusion of government department in the affairs of business to the minimum and therefore stressed the need for self regulation to the extent possible.

Also read: Growth of SME sector in India

The ‘in principle’ nod to the proposal by the Revenue Department would go a long way in enabling a large number of entrepreneurs to raise equity by selling ancestral properties and raise their level of investments and thereby boost employment. He said that the DIPP had given its approval to third party certification in the case of boilers.

Singh, however, said that the Labour Department had certain reservations to the idea, citing the ILO regulations as benchmarks and sovereign functions as being paramount.

“These are not sovereign functions, but are statutory functions of the government. The Department had sought fiscal benefits for skill upgradation by treating it on a par with R&D to avail of 150 per cent weighted deduction on investments in skill upgradation.”

He expressed the hope that the proposal would be acceded to by the Finance Ministry.