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Wednesday, Jan 16, 2002

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ICAI plea for tax incentives to listed cos

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NEW DELHI, Jan. 15

THE Institute of Chartered Accountants of India (ICAI) has urged the Finance Ministry to exempt listed companies from the rigours of the condition that takes away the benefit of the 10-year tax holiday to a 100 per cent export-oriented undertaking, which undergoes a change in ownership after the first year of it being set up.

In its pre-Budget memorandum to the Finance Ministry, the ICAI has said that such a restriction in Section 10B of the Income-Tax Act would discourage listed public companies from setting up a 100-per cent export-oriented unit.

"In an increasingly market-oriented business environment, such conditions should not be applicable. The Government should facilitate an environment that allows the market forces to determine the existence of an enterprise. Such conditions deter the mergers and acquisitions activities in industries," a senior ICAI official told Business Line here.

The Finance Minister, Mr Yashwant Sinha, has already indicated that the Union Budget for 2002-03 will bring about changes in the existing mergers & acquisitions framework in line with the current needs of the economy.

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