Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: TAX RATES - GOODS TAXABLE @ 4% :: TDS :: articles on VAT and GST in India :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: list of goods taxed at 4% :: form 3cd :: cpt :: ACCOUNTING STANDARD :: VAT Audit :: ARTICLES ON INPUT TAX CREDIT IN VAT :: empanelment :: due date for vat payment :: Central Excise rule to resale the machines to a new company :: ACCOUNTING STANDARDS :: VAT RATES
 
 
News Headlines »
 How to calculate capital gains tax on property sold at less than stamp value?
 Return Filing - Under GST, this is how you will file tax returns from July 1
 Income tax filing FAQs part 1
 Filing Income Tax Returns? Things To Keep In Mind As Deadline Approaches
 Filing of online return for 4th quarter of 2016-17- extension of period thereof.
 New tax accounting standards may reduce leeway for infrastructure companies
 GST – CONCEPT & STATUS – As on 01st May, 2017
 Govt extends VAT deadline, relief for developers
 Income Tax Appellate Tribunal Rules, 2017
 Got your Form 16? You should file income tax returns early to enjoy benefits
 Want to save tax? Here are 6 best investment options for you

Corporate tax mop-up rises 52% in FY07
January, 22nd 2007

Though the actual corporate tax rate is 33.66%, the effective tax rate paid by India Inc is just 17%, thanks to an array of tax breaks. The finance ministry may push for pruning tax exemptions even as Indian industry seeks a lower corporate tax rate.

Corporates have been able to lower their tax liability mainly on account of tax breaks. Companies can claim several exemptions such as tax holidays for SEZs and software technology parks, 100% EOUs and backward area benefits. There are around 3.5 lakh corporate tax assessees in India. A similar exercise done for 2004-05 showed that the effective rate was 19.4%. The analysis titled Tax Expenditure under the Central System was incorporated, for the first time, in the 2006-07 Budget. It was based on a sample of 1,689 companies.

With the Budget just a few weeks away, policy managers are likely to factor in the calculations on the effective tax rate for FY06 while taking a policy decision on any rate change. Pruning of tax exemptions will bring the effective tax rate closer to the statutory corporate tax rate.

In FY06, the government cut corporate tax rate to 30% from 35%, but hiked the surcharge from 2.5% to 10%. Depreciation rates were lowered on general machinery, though the rate for new machinery was hiked. The FM had said that these measures would result in a near 3% relief in corporate tax rate. The relief was partly offset by the fringe benefit tax.

Corporate tax revenues during FY07 are growing at a fast clip, thanks to the buoyancy in GDP and better compliance. Collections were up 51.8% till December-end against the projected growth of 29%. The buoyancy in collections has prompted India Inc to pitch for a lower tax rate.

An independent analysis done by ET of 55 sectors showed an average effective tax rate of 21% during FY06. The effective tax rate has been calculated by taking the current tax paid by companies as a percentage of the profit before tax. The study shows that some of the highest effective tax payers were sectors like automobiles, capital goods, banks, metals, auto ancillaries and paints and varnishes. The fact that automobiles pays one of the highest effective tax rates perhaps indicates that this sector is not benefiting as much from exemptions.

There are some expected categories among the lowest tax paying sectors. These include IT, telecom, pharmaceuticals, power generation and cement. Tax exemptions are the reason for ITs low effective tax rate. Cement companies usually locate their plants in backward areas, making them eligible for tax benefits. Pharmaceutical companies, apart from having 100% EOUs for export also benefit from the 150% weighted deduction on research and development expenditure.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Software Development Software Programming Software Engineering Custom Software Development Requirement Based Software Development Software Solutions Software Serv

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions