An autonomous research institute under the Ministry of Finance


Impact on States of Central Tax Preferences: An Analysis of Important Tax Preferences

Publication date

Jan, 2009


Report submitted to the Thirteenth Finance Commission


R. Kavita Rao


This study attempts to assess the statewise impact of central tax preferences. Since there are a large number of tax preferences, an attempt has been made to assess and allocate the impact of some of the major tax preferences. It is found that if the preferences specifically targeted towards the backward areas are not included, there is a bunching of incentives in higher income states. However, some of this impact is neutralized by the benefits accruing on account of the incentives provided to backward areas.

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