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2 Feb 2026·Source: The Indian Express
4 min
EconomyNEWS

Tax Relief for Apple: Centre Removes Tax on Equipment Funding

Centre removes tax liability on equipment funding, benefiting Apple.

Tax Relief for Apple: Centre Removes Tax on Equipment Funding

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The government has removed tax liability on equipment funding, providing relief to companies like Apple. This move is aimed at attracting global talent and boosting investment in the manufacturing sector. The removal of tax liability is expected to encourage companies to invest more in equipment and infrastructure. This will enhance production capacity and create more jobs. The decision is part of a broader effort to improve the ease of doing business in India.

Key Facts

1.

Tax liability removed: Equipment funding

2.

Beneficiary: Apple

UPSC Exam Angles

1.

GS Paper III (Economy): Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

2.

Connects to the syllabus through topics like taxation, investment, industrial policy, and ease of doing business.

3.

Potential question types include statement-based MCQs on tax reforms, analytical questions on the impact of tax policies on investment, and critical questions on the challenges of tax administration.

Visual Insights

Impact of Tax Relief on Equipment Funding

Key statistics related to the tax relief on equipment funding and its potential impact on the Indian economy.

Expected Increase in Equipment Investment
SignificantN/A

Tax relief is expected to encourage companies to invest more in equipment and infrastructure, enhancing production capacity.

Potential Job Creation
More JobsN/A

Increased investment in manufacturing is expected to create more jobs in the sector.

More Information

Background

The removal of tax liability on equipment funding is a measure designed to boost investment and improve the ease of doing business. This relates to broader economic policies aimed at attracting foreign investment and promoting domestic manufacturing. The concept of taxation has evolved significantly over time, from simple levies to complex systems designed to fund government activities and influence economic behavior. Historically, India's tax system has undergone numerous reforms. Key milestones include the introduction of Value Added Tax (VAT) and the more recent implementation of the Goods and Services Tax (GST). These reforms aimed to simplify the tax structure and improve compliance. The current move to remove tax liability on equipment funding can be seen as a continuation of these efforts to create a more favorable investment climate. The legal framework for taxation in India is primarily governed by the Income Tax Act, 1961 and the GST Act, 2017. These acts outline the rules and regulations for various types of taxes, including corporate tax, income tax, and indirect taxes. The power to levy taxes is constitutionally divided between the central and state governments, as defined in the Seventh Schedule of the Constitution. Internationally, tax policies are often influenced by global trends and agreements. The Base Erosion and Profit Shifting (BEPS) project, led by the OECD, aims to combat tax avoidance strategies used by multinational corporations. India is a signatory to the BEPS agreement and has been implementing measures to align its tax policies with international standards.

Latest Developments

Recent government initiatives have focused on improving the ease of doing business in India. This includes simplifying regulatory processes, reducing compliance burdens, and providing tax incentives to attract investment. Schemes like Make in India and Production Linked Incentive (PLI) scheme aim to boost domestic manufacturing and exports. There are ongoing debates about the optimal level of taxation and the impact of tax policies on economic growth. Some argue that lower taxes can stimulate investment and create jobs, while others emphasize the importance of government revenue for funding public services and infrastructure. Institutions like NITI Aayog and the RBI play a crucial role in shaping these policy discussions. The future outlook for tax policy in India is likely to focus on further simplification and digitalization. The government aims to create a more transparent and efficient tax system that encourages compliance and reduces tax evasion. Upcoming milestones include the further streamlining of GST and the implementation of measures to combat tax avoidance. Challenges remain in balancing the need for revenue with the desire to attract investment. The government must also address issues such as tax evasion and the informal economy to ensure a level playing field for all businesses.

Frequently Asked Questions

1. What are the key facts about the tax relief for Apple for UPSC Prelims?

The key facts are that the government has removed tax liability on equipment funding, which benefits companies like Apple. This is aimed at attracting global talent and boosting investment in the manufacturing sector.

2. What is the main aim of removing tax liability on equipment funding?

The main aim is to attract global talent and boost investment in the manufacturing sector. This is part of a broader effort to improve the ease of doing business in India.

3. How does the removal of tax liability on equipment funding impact the common citizen?

The removal of tax liability is expected to encourage companies to invest more in equipment and infrastructure, which can enhance production capacity and create more jobs. More jobs mean more income for common citizens.

4. What are the recent government initiatives related to this tax relief?

Recent government initiatives have focused on improving the ease of doing business in India. This includes simplifying regulatory processes, reducing compliance burdens, and providing tax incentives to attract investment. Schemes like Make in India and Production Linked Incentive (PLI) scheme aim to boost domestic manufacturing and exports.

5. Explain the concept of 'ease of doing business' in the context of this news.

Ease of doing business refers to the regulatory environment that affects businesses. Removing tax liability on equipment funding is one way to improve this environment, making it more attractive for companies to invest and operate in India. This involves simplifying processes and reducing burdens.

6. How can this tax relief impact the 'Make in India' initiative?

The tax relief on equipment funding can positively impact the 'Make in India' initiative by encouraging companies to invest more in domestic manufacturing. This can lead to increased production, job creation, and overall economic growth.

Practice Questions (MCQs)

1. Consider the following statements regarding the recent tax relief provided by the Indian government: 1. The tax relief is specifically targeted at companies like Apple to attract global talent. 2. The removal of tax liability is expected to discourage investment in equipment and infrastructure. 3. The decision aims to improve the ease of doing business in India. Which of the statements given above is/are correct?

  • A.1 and 2 only
  • B.3 only
  • C.1 and 3 only
  • D.1, 2 and 3
Show Answer

Answer: C

Statement 1 is CORRECT: The tax relief is indeed targeted at companies like Apple to attract global talent and boost investment in the manufacturing sector. Statement 2 is INCORRECT: The removal of tax liability is expected to ENCOURAGE investment in equipment and infrastructure, not discourage it. Statement 3 is CORRECT: The decision is part of a broader effort to improve the ease of doing business in India.

2. Which of the following is the primary objective of removing tax liability on equipment funding, as per the news?

  • A.To increase government revenue
  • B.To discourage foreign investment
  • C.To attract global talent and boost investment in the manufacturing sector
  • D.To reduce job creation
Show Answer

Answer: C

The primary objective, as stated in the news, is to attract global talent and boost investment in the manufacturing sector. The removal of tax liability is intended to make India a more attractive destination for companies looking to invest in equipment and infrastructure.

3. The Goods and Services Tax (GST) in India was introduced based on the recommendation of which committee?

  • A.Kelkar Committee
  • B.Vijay Kelkar Committee
  • C.Rangrajan Committee
  • D.Narasimham Committee
Show Answer

Answer: B

The Goods and Services Tax (GST) in India was introduced based on the recommendation of the Vijay Kelkar Committee. This committee was tasked with recommending tax reforms, and GST was one of its key recommendations.

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