Mar. 19 – The Indian government has extended the five-year tax holiday for hotel projects from March 31 to July 31 in an effort to stimulate development in the industry prior to the Commonwealth Games in October.
The five-year tax holiday previously applied to hotels finished and operational from April 1, 2007 to March 31, 2010 covering two, three and four-star category hotels and convention centers in the National Capital Territory of Delhi and the districts of Faridabad, Gurgaon, Gautam Budh Nagar and Ghaziabad. The new extended tax holiday scheme will continue to offer the special tax discount rates in the next five years for hotels finished by the July 31 deadline under Section 80-ID of the Income Tax Act.
The tax incentive is being extended to help hotel projects struggling with construction due to the effects of the global financial crisis. The government estimates that around 40,000 rooms will be needed during the Commonwealth Games and only 10,000 hotel rooms are available in New Delhi. The missing gap will be filled in by rooms available in Haryana, the Delhi Development Authority, Uttar Pradesh, Paharganj and Karol Bagh.
