Indian Budget Offers Tax Relief For Drugmakers R&D

India's 1997-98 federal budget has offered a 125% depreciation benefitfor research and development facilities for selected industries, including those of drugs and pharmaceuticals. Currently the tax benefit on the money spent on capital equipment for in-house R&D is 100%.

Pharmaceutical companies are also likely to benefit from the abolition of the corporation tax surcharge, and a cut in the corporate tax rate on domestic companies to 35% and on foreign drugmakers to 48%.

The new budget also provides reduced taxes on imports of certain chemicals used in the manufacture of drugs.