In a move that bats for small investors, FICCI is demanding the Finance Minister, P Chidambaram to lower the eligibility demand for investment allowance.
Naina Lal Kidwai Country Head, President, FICCI, while pressing the need for an effective dispute redressal mechanism on tax front, today said that over Rs 20,000 crore is locked up in litigations. Kidwai's comments come on the back of the Union Budget 2013-14 announced by Finance Minister, P Chidambaram on Thursday.
Kidwai is also demanding the Finance Minister, to lower the eligibility limit for allowance on investments made by manufacturing companies in new plant and machinery. Kidwai believes if the FM lowers the investment allowance, it could give a boost to small entrepreneurs.
"We would like you to consider offering the investment allowance at 15% for all manufacturing projects that involve investments in plan and machinery of a minimum of Rs 10 crore for two years as against the Rs 100 crore as catered in the Budget," says Kidwai. This 'crucial support', according to Kidwai, can benefit scores of small entrepreneurs.
Apart from benefiting small entrepreneurs, Kidwai hopes the FM also bears in mind that his move to tax the super-rich, has taken corporates' tax rate close to 36%.
Chidambaram in the Union Budget 2013-14 announced on Thursday proposed a new surcharge of 10% for individuals earning Rs 1 crore or more a year. Domestic firms with taxable income of more than Rs 10 crore per year will now have to pay 10% surcharge instead of 5% earlier. To know more of the Budget's Highlights, click here.
"There was limited tweaking that came in the temporary imposition of a surcharge. It came in the form of surcharge on individuals and corporates. I think industry as a whole was relieved to find that direction. While we appreciate the compulsions behind it, we do need to bear in mind that it takes the tax rate for corporates close to 36%. This is certainly on the higher side when compared to the effective tax rates in emerging markets," opines Kidwai.