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Companies seek cut in income, corporate tax; sops for export
February, 11th 2009

A week ahead of the interim budget, industry chambers have asked the government to reduce income and corporate tax to 25% and boost infrastructure investments, besides extending sops for exporters, reeling under the impact of global slowdown.

Apex chamber Ficci said while reduction in excise duty has brought down prices but nothing has been done to increase the purchasing power of people, which has squeezed margins for companies due to fall in demand.

They (government) have reduced excise duty but still demand is not picking as there is no disposable income in the hands of people so personal tax rate should be brought down to 25%, the chamber said, adding, corporate tax rate should also be brought down.

Currently personal income tax at the peak rate is charged at 30% and corporate tax is levied at 30%, besides surcharge and education cess.
In the interim budget, to be announced on 16 February, the government should take steps to motivate the corporate sector which has slowed down on expansion plans as they do not want to take risk, it added.

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