Industry chamber Assocham on Friday called for increasing tax holiday period to 10 years for the capital-intensive oil and gas exploration sector in the upcoming Budget.
Provision of section 80-1B (9) of the Income Tax Act should be amended to extend the period of seven years of tax holiday to 10 years, it said, adding that companies be allowed to choose the period during initial 15 years of operations.
"During the initial seven years, companies have large expenditure
to set off and hence the actual benefit of tax holiday does not reach them," Assocham said.
This period is less than the tax holiday period available to companies in infrastructure sector like power generation and distribution.
"It is expected that extension of tax holiday will benefit refining companies starting operations in 2012-13," Assocham President Rajkumar Dhoot in a pre-Budget memorandum to Finance Minister Pranab Mukherjee.
The Finance Minister will present the Budget for 2012-12 on March 16.
