Sinha announced these amendments to his budget proposals while moving theFinance Bill in the Lok Sabha on Wednesday.

A Rs 150-crore fund will be set up for promoting R&D in the pharma industryand the weighted deductions for expenses incurred by pharma andbiotechnology companies will be raised from 125 per cent to 150 per cent,Sinha said.

The minister also announced that concessions available to units set up infree trade zone or software technology parks and to export-oriented unitswill be phased out over a 10-year period. Units set up till March 2000 willhave concessions for 10 years and those set up in 2000-2001 and 2001-2002for nine and eight years respectively and so on.

The concessions will be available for IT-enabled services as well.Concessions on domestic sales up to 25 per cent of the total sales willcontinue, Sinha said adding that units in special economic zones will alsoenjoy the same benefits.

For venture capital funds, there will be no tax on distributed orundistributed income. The income distributed will only be taxed in the handsof investors at the rates applicable to the nature of income, he said.The shares received by employees' stock option plan will not be regarded asperquisites and would be taxed as capital gains at the time of sale, theminister said.

The surcharge on non-corporate assessees having income above Rs 1,50,000will continue to be 15 per cent but for the purpose of tax deduction atsource (TDS), it will only be 10 per cent to avoid operationalcomplications, Sinha said.

In a bid to boost the capital market and infrastructure sectors, he proposedto double the investment limit in infrastructure bonds to Rs 20,000 forrebate under Section 88 and the exemption limit of tax at source on non-bankdeposits to Rs 5,000.

He also reduced the lock-in period from five years to three years forinvestment of capital gains in bonds of NHAI and Nabard.

To promote housing activity, the finance minister raised the limit ofdeduction of interest payable on loans for acquiring self-occupiedproperties from Rs 75,000 to Rs 1 lakh.

The benefit of 100 per cent deduction provided to donations made to IndianOlympic Association is proposed to be extended to other national sportsassociations recognised under Section 10(23) of the Income Tax Act.Charitable companies having no profit motive will be exempt from minimumalternate tax. TDS on compulsory acquistion of farm land would bediscontinued and exemption limit of tax at source on non-bank deposits wouldbe raised to Rs 5,000 from Rs 2,500.

Indirect-tax amendments: Basic customs duty on tea and coffee has been hikedto 35 per cent from 15 per cent, poultry meat and their preparations to 100from 35 per cent and non-coking coal to 25 per cent from 15 per cent.

Additional duty of customs (CVD) on marble slabs and tiles has been changedfrom Rs 30 per square metre to 16 per cent. The changes in excise andcustoms duties, the minister said, will come into force from May 4.

Silicon, E-Mal and intravenous fluids, tapioca starch and Asafoetida(heeng), he said, will be fully exempt from Cenvat and biscuits of MRP notexceeding Rs 5 per packet and weight not exceeding 100 grams will be 50 percent exempt.

Duty-free clearance limit of paper made from non-conventional raw materialshas also been increased from 2500 tonnes to 3000 tonnes in a year.

The Government has decided to exempt Artemisinin from basic customs duty.Duty on DBM, fused magnesia and sea water magnesia of certain specificationshas been reduced to 25 per cent from 35 per cent.