Need Tally
for Clients?

Contact Us! Here

  Tally Auditor

License (Renewal)
  Tally Gold

License Renewal

  Tally Silver

License Renewal
  Tally Silver

New Licence
  Tally Gold

New Licence
 
Tally On Cloud Tally on Cloud: Ready for the Daily Backup Requirement
Keep your Tally books accessible from anywhere while supporting your Rule 46(8) obligations. With daily backups configured on servers physically located in India, Tally on Cloud helps you maintain the backup arrangement required for electronic books of account under the Income-tax Rules, 2026. Move your Tally to the cloud with confidence.
Open DEMAT Account with in 24 Hrs and start investing now!
« Top Headlines »
Open DEMAT Account in 24 hrs
 Mock Test Papers Series - I & II for Students appearing in CA Foundation January 2027 Examination.
 Income Tax Rules 2026: CBDT Introduces Revised Form 161 for Penalty Waiver, Clarifies Misreporting Categories and Taxpayer Relief
 ITR Filing and Income Tax Audit Deadline Extended: 5 Critical Things Taxpayers Must Know
 Filing Belated ITR for AY 2026-27? Know Which Losses You Can Carry Forward and Which You May Lose
 CBDT Extends Tax Audit Report Deadline to October 21, ITR Filing Last Date to November 21 for AY 2026-27
 CBDT Extends AY 2026-27 ITR Filing Deadline for Tax-Audit Cases: New Dates and Key Compliance Details
 Foreign Assets Missing From Your ITR? Income Tax Department Opens One-Time Disclosure Window
 Tax Audit Deadline September 30: Why AIS, TDS and GST Figures May Not Match Your ITR and What Taxpayers Should Do
 Tax audit deadline September 30: Common mistakes taxpayers should avoid
 Your ITR says ‘verified’, but the refund hasn’t arrived? 5 reasons why your money could be stuck
 Missed the ITR Deadline but TDS Refund Is Due? Here’s How You Can Still Claim Your Money

Tax exemptions: little sense in continuing them
February, 07th 2007

On last count, at least 260 million people in the country, make do with less than Rs 21 a day. That means 25 % of Indias population shares just about Rs 6,555 crore between themselves in a year. This is just about the same as the tax concession given by the government to the corporate sector for profits derived from setting up infrastructure facilities, SEZ, and so on.

The tax concessions for developing housing projects, storage and transportation of food grains and others are almost double the cash available for the poorest one fourth population of the country, at Rs 11,523 crore.
 
What is more, at a conservative estimate of the finance ministry the cost of tax exemptions for the sharp spurt in SEZ schemes is expected to touch Rs 100,000 crore in another four years.

If instead in any year, the government could distribute the sum to those below the poverty line as cash handouts, it would have immediately pulled most of these people above the poverty line.

On the other hand, the proponents of tax exemptions often say that the value addition to the economy, made by the benefiting companies, outweigh the losses.

But that is not yet adequately quantified. When the economy is cruising along on a high growth rate, there is a case for eliminating a large number of these exemptions. The finance ministry estimates that the tax exemptions on the big direct and indirect taxes added up to Rs 1,58,661 crore for the year 2004-05.

This is about two thirds of the total tax revenue collected for that year. To give another suitable comparison, the latest Economic Survey says the total spend by the central government for all social services and rural development programmes in the same year was Rs 57,724 crore, or just about a third of the cost of the tax exemptions for that year.

Prime Minister Manmohan Singh and finance minister P Chidambaram have already made their intention clear to d something about this in Budget 2007. This should therefore be one big action area to watch out for.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2026 CAinINDIA All Right Reserved.
Designed and Developed by Ritz Consulting