DIPP to exempt SMEs from capital gains tax

Department of Industrial Policy and Promotion (DIPP) Secretary R P Singh, said that the national manufacturing policy (NMP) proposal will grant exemption to small and medium enterprises (SMEs) from capital gains tax. This "in principle" has been approved by the Revenue Department of the Finance Ministry, in an interactive meeting on "National Manufacturing Policy" organised by FICCI.
Singh added that one of the key proposals in the manufacturing policy to improve access to finance for SMEs was the exemption from capital gains for investment into an enterprise as it is done in the case of investment into a residential property, under Sections 54 and 54(F) of the Income Tax Act.
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.
The national manufacturing policy also proposes that government procurement with the stipulation of local value addition will be used in areas where government procurement needs over a number of years can be clubbed to create volume and scales. This would foster the development of domestic manufacturing capabilities.