An exemption from payment of income tax granted to a newly established small-scale unit is called

Tax Holiday is the name for an exemption from income tax granted to a newly established unit, usually for its first few years of operation. An investment allowance and a development rebate are deductions linked to capital investment in new plant or machinery, not an exemption from tax, and a rehabilitation allowance supported re-establishing a business whose assets were destroyed by a calamity such as flood or fire.