The Hindu Business Line : Banks pitch for tax sops on infrastructure loans

Budget wish-list: (From left) Mr M.B.N Rao, Chairman and MD, Canara Bank ; Mr. P. Chidambaram, Finance Minister; and Mr H. N. Sinor, Chief Executive, Indian Banks’ Association, in the Capital on Tuesday. –

Our Bureau

New Delhi, Feb. 12 Public sector banks (PSBs) on Tuesday urged the Finance Minister, Mr P Chidambaram, to restore tax exemption on income received by the banks from their long term financing of infrastructure projects.

“We want the Government to restore tax exemption benefits under Section 10(23G). This would enable us to lower the cost of borrowing for those entities that are implementing infrastructure projects”, Mr H.N. Sinor, Chief Executive of Indian Banks’ Association (IBA) told Business Line after the Finance Minister’s meeting with PSB chiefs here today.

He also said that banks had requested the Finance Minister to bring changes in income tax law to allow tax deduction on the amount provided towards bad and doubtful debts as per RBI guidelines.

Moreover, banks also want the Finance Minister to do away with fringe benefit tax on contributions made by scheduled banks to a pension fund for employees created in lieu of provident fund.

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