Finance Minister Nirmala Sitharaman on February 1 will present the Union Budget for the fiscal year 2023-2024.
With all eyes on Budget 2023, it is imperative for people to know the key terms associated with the annual exercise.
What is Tax Abatement?
In order to boost economic development, the government reduces taxes for corporates and businesses for a certain period. Such reductions are called tax abatement. The purpose of abatement is to support the development or economic activity within a city or community.
Also Read | Budget 2023 | What is Demand for Grants?
Property tax is one of the most common types of tax abatement given to businesses for a certain period to expand their existing operations within the city. If an individual or business entity is paying too much tax, it can request the tax authorities for tax abatement.
Most abatements expire after a fixed number of years, at which point taxes return to their ordinary level.
Also Read | Budget 2023 | What is Real Economic Growth Rate?
Abatements are often seen in the real estate industry. There are tax abatement programs existent in certain cities that cut down property tax payments on homes. Abatements also attract more buyers to locations having low demand.