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Tuesday, Dec 31, 2002

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Scrap 5% surcharge on personal, corporate tax: CII

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NEW DELHI, Dec. 30

THE Confederation of Indian Industry (CII) has called for the abolition of the five per cent surcharge on personal and corporate tax and Minimum Alternative Tax (MAT).

In its pre-Budget memorandum, which was submitted to the Government today, CII has also stressed the need to eliminate the dividend tax in the hands of the recipients and for reduction of corporate tax rates for domestic and foreign companies to 30 per cent.

The 186-page document also calls for allowing indefinite carry-forward of business losses and unabsorbed depreciation and for maintaining the existing differential in depreciation rates between the Income-Tax Act and Companies Act.

CII has also called for doing away with the special excise duty of 16 per cent within a year and for setting an eight per cent excise duty on textiles, garments and apparel, computer hardware and GC sheets.

To facilitate corporate restructuring through mergers, amalgamations and de-mergers, the chamber has suggested widening the scope of section 2(19AA) and section 72 A. Further, to help in the restructuring of banks, FIs and non-banking financial companies (NBFCs), the chamber has called for providing greater tax incentives on the provisioning for non-performing loans.

Besides, the document also calls for maintaining the rebate for senior citizens at Rs 15,000 and for increasing the deduction for medical expenses from the existing Rs 40,000 to Rs 50,000.

The chamber has called for having only four slabs for those paying income tax. While those earning up to Rs 1,50,000 annually should be charged no income tax, those whose annual salary is between Rs 1,50,000 and Rs 3,00,000 should be charged a tax of 10 per cent while those earning between Rs 3,00,000 and Rs 5,00,000 should be charged an income tax of 20 per cent. Similarly, those earning more than Rs 5,00,000 annually should attract an income tax of 30 per cent.

Besides, the chamber has also made a case for the growth of textiles and tourism sectors. For the textiles, garments and apparel sector, CII has recommended eight per cent excise duty on yarn, woven and knitted fabrics, garments and made-ups.

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