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: due date for vat payment :: empanelment :: ACCOUNTING STANDARDS :: cpt :: list of goods taxed at 4% :: Central Excise rule to resale the machines to a new company :: TAX RATES - GOODS TAXABLE @ 4% :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: TDS :: VAT Audit :: articles on VAT and GST in India :: VAT RATES :: ARTICLES ON INPUT TAX CREDIT IN VAT :: form 3cd :: ACCOUNTING STANDARD
 
 
News Headlines »
 Here's why you must always check Form 26AS before filing tax return
 Want to file your income tax return after June 30? Having Aadhaar card is a must
 Timeline for filing of tax returns extended by two months
 Top 5 common mistakes to avoid while filing your income tax returns
 GST rollout on July 1: Deadline for filing tax returns extended
 What is GST?
 Income-tax (15th Amendment) Rules, 2017?
 Banks get a breather as GST Council extends deadline for tax filing
 Income Tax filing: Your easy guide in 7 steps
 E-filing income tax return: How individuals can upload any ITR using excel utility
 Top 10 common mistakes to avoid when e-filing your income tax return

Finmin may not tinker with corp tax rate
January, 18th 2010

The finance ministry is likely to keep the corporate tax rate unchanged at 30%, as it faces stiff resistance from companies to the draft direct tax code's proposal to cut the rate to 25% and remove all exemptions.

"Corporates are resisting the phasing out of exemptions even with a lower tax rate," said a senior government official.

The industry prefers the current system where the effective corporate tax rate is only about 20% due to various exemptions, he said requesting anonymity.

The Central Board of Direct Taxes, the key government body that formulates and administers tax policy, is not willing to cut rates, as any reduction in statutory rate will further reduce the effective rate and dent the government's revenues.

The government is already struggling with a 16-year high fiscal deficit, equivalent to 6.8% of the gross domestic product for the 2009-10 fiscal year.

The finance ministry is also likely to retain the tax exemption given to retirement savings at the time of withdrawal in the draft direct taxes legislation.

The tax code has also suggested and exempt-exempt-tax (EET) taxation regime for existing schemes such as provident fund. Under an EET arrangement, investments in savings schemes and the returns earned on them are exempt from tax, but the entire corpus is subject to tax at the time of withdrawal. The proposal has received flak from financial experts.

The government seems to be in favour of continuing the existing regime that is a mix of EEE (exempt-exempt-exempt ), EET and ETE (exempt-tax- exempt).

The draft direct taxes code, unveiled in August 2009, seeks to replace the decades old Income Tax Act, 1961. The code is proposed to come into effect from April 1, next year.

These changes along with a proposal to levy a minimum alternate tax (MAT) on gross assets figured in the discussions at a meeting between Prime Minister Manmohan Singh and finance minister Pranab Mukherjee, said the official quoted earlier.

The review exercise is now aimed at bringing a new law that will further the objective of reform , yet be acceptable to 'aam aadmi'. The official said the key policymakers are keen to continue with the proposed MAT on gross assets. But the definition of gross assets could be changed to give some relief to asset heavy infrastructure companies.

The draft code has proposed a levy of 2.0% MAT on the value of gross assets of all non-banking companies and 0.25% on banking companies.

The value of gross assets is the aggregate value of fixed assets of a company, capital works in progress and the book value of other assets, after taking out the accumulated depreciation on fixed assets and the debit balance of the profit and loss account, if included in the book value.

The finance ministry is looking to keep capital works in progress out of this definition to give relief to infrastructure companies.

"The industry's reservations on asset-based MAT is on the very principle of it and hence does not get adequately addressed by exempting elements like work-in-progress .

While the infrastructure sector, with its long gestation periods, will get relief for the initial period, what constitutes work-in-progress will become a bone of contention with the revenue authorities.

I still believe that the MAT provisions existing in the current Act should be continued with minor tweaks, if necessary" said Amitabh Singh, partner, Ernst &Young.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Software Outsourcing Company Offshore Software Outsourcing Software Outsourcing Company India Offshore Outsourcing Company India Software BPO Software Business Process Outsourcing Software Outsourcing India Offsho

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