Financial Daily from THE HINDU group of publications
Saturday, Jul 24, 2004
Financial Daily from THE HINDU group of publications Saturday, Jul 24, 2004 |
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Corporate
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Income Tax 2 alternative packages on corporate I-T Our Bureau
New Delhi , July 23 THE Kelkar Task Force on Fiscal Responsibility and Budgetary Management Act 2003 (FRBM) has suggested two alternative packages, each of which is revenue positive, for corporate income-tax. The first candidate package proposes that all existing tax incentives should be `grandfathered' for existing units, but removed for new units. It has also suggested a reduction in the general depreciation rate from 25 per cent to 10 per cent. Further, the package also recommends a reduction in the corporate tax rate from 35.875 per cent to 30 per cent for domestic companies. The second candidate package differs from the first in two major respects. It is proposed to eliminate the tax on distribution of dividends, while preserving exemption from income-tax of dividends in the hands of the recipient. It is also proposed to phase-out incentives, instead of grandfathering them.
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