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: Central Excise rule to resale the machines to a new company :: empanelment :: TDS :: ARTICLES ON INPUT TAX CREDIT IN VAT :: ACCOUNTING STANDARD :: VAT RATES :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: due date for vat payment :: list of goods taxed at 4% :: ACCOUNTING STANDARDS :: cpt :: TAX RATES - GOODS TAXABLE @ 4% :: articles on VAT and GST in India :: VAT Audit :: form 3cd
« News Headlines »
 Make your inventory and invoicing software GST Ready from Binarysoft
 Filing income-tax returns gets simpler for salaried persons
 Ten rules you must follow while filing income tax returns
 Reforming the income tax tribunal
 How the new system might impact consumers and businesses
 10 ways you get benefited from filing your tax return
 Returns under CGST Act,2017 with Rules
 Ten facts to know about filing income tax return this year
 The Ten Commandments of Tax Filing
 How to claim income tax refund
 How to time your buys to have best of two tax regimes

Tax Revenue Foregone Statement
August, 03rd 2009

When the finance minister presents the Finance Bill, the Budget Division of the Ministry of Finance prepares several documents which are also laid before the Parliament. One such document is the Revenue Foregone Statement. It was first presented during Budget 2006-07. A second edition of the statement was presented during Budget 2007-08 as an annexure and also as a standalone document entitled Statement of Revenue Foregone. The intention behind issuing the document is perhaps to bring about transparency in matters of tax policy. A cursory glance over this years statement suggests that for corporate taxpayers, the effective tax rate is 22.24 per cent, as against the rate of 20.60 per cent clocked in during 2006-07. Sample companies with profits before taxes (PBT) of Rs 500 crore and above accounted for 54.98 per cent of the total PBT and 54.02 per cent of the total corporate income tax payable. However, their effective tax rate was only 21.85 per cent, in comparison to an effective tax rate of 24.04 per cent for sample companies having PBT of up to Rs 1 crore.

The ratio of total income to PBT is much higher for companies with PBT of up to Rs 1 crore (76.93 per cent) than that for the total sample (67.44 per cent). This indicates that lesser deviance from PBT in the case of relatively smaller companies as compared to larger companies because the latter avail of higher tax concessions.

The above figures signify the importance of small- and medium-size enterprises (SME), both in terms of their contribution to the governments exchequer and their provision of pervasive employment opportunities. Another important fact which needs to be noted is the discrepancy in effective tax rates between the manufacturing sector and the service sector, at least in regard to the companies analysed in the survey. The effective tax rate for almost all industries is below the statutory level, but the statistics disclosed in the Revenue Foregone Statement reveal that it is especially low for IT-enabled and BPO service providers, at 15 per cent, and for software development agencies, at 12 per cent. These numbers are attributable to the tax concessions which these industries currently enjoy.

The Income Tax Department had received 410,451 electronically filed corporate returns for the financial year 2007-08 by 31 March 2009. Yet the approximate number of registered companies in India approaches 800,000.

The irresistible inference is that the corporate tax base still needs to widen relative to the total number of companies registered in India. Service sector companies do not shoulder their share of the burden as compared to small- and medium-size enterprises. If policy makers need to withstand and overcome the challenges arising from continuing fiscal deficits, then it is imperative that these anomalies be seriously considered and evaluated.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - We Bring IT. Offshore software outsourcing company. We use Global Delivery Model (GDM) and believe in Follow The Sun principle

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