The Second UPA Governament's First Budget Has Been Revealed On Monday...Here Is An Overview Of The Highlights....

Union Budget 2009 - Post budget analysis

Shri Pranab Mukherjee proposed to extend the scope of the current provision of weighted deduction of 150% on expenditure incurred on in-house R&D to all manufacturing businesses except for a small negative list.The definition of the term "manufacture" has been amended .This amendment in definition will take retrospective effect from the 1st day of April, 2009 and will, accordingly, apply in relation to assessment year 2009-2010 and subsequent years. [Clause 3]

"The new definition of the term "manufacture", could be with reference to 150% weighted deduction under Section 35 (2AB)," said Abhishek Goenka, Partner, BMR  Advisors.Meanwhile the scope of Section 35 (2AB) has been expanded to include manufacture of any article or thing (other than Schedule XI items). There has also been an amendment in section 194I (For TDS on Rentals) of the Income-tax Act. For clauses (a), (b) and (c), the following clauses shall be substituted with effect from the 1st day of October, 2009, namely:— "(a) two per cent. for the use of any machinery or plant or equipment; and (b) ten per cent. for the use of any land or building (including factory building) or land appurtenant to a building (including factory building) or furniture or fittings."