DTC switchover to cost govt Rs 53000cr loss: Revenue Secy
Published on Mon, Aug 30, 2010 at 19:04 | Source : Moneycontrol.com
Updated at Mon, Aug 30, 2010 at 22:26
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DTC switchover to cost govt Rs 53000cr loss: Revenue Secy
The switchover to DTC with higher exemption limits and lower corporate tax, Revenue Secretary Sunil Mitra says, will cost the government a revenue loss of Rs 53,172 crore on reduced rates and a loss of Rs 38,829 crore in the first year from corporate tax rate.
The government on Monday introduced in Parliament a bill to overhaul its archaic direct tax codes, a key reform aimed at simplifying procedures for investors and bring in more revenue by widening the tax net.
This switchover to DTC with higher exemption limits and lower corporate tax, Revenue Secretary Sunil Mitra says, will cost the government a revenue loss of Rs 53,172 crore on reduced rates and a loss of Rs 38,829 crore in the first year from corporate tax rate. "India's direct tax collection for 2011-12 is expected to be at Rs 5.27 lakh crore in the first year, if current rates hold," he adds.
The bill proposes to cut tax rates, replace profit-linked exemptions for companies with investment-linked incentives and simplify rules on corporate mergers, aimed at creating a tax code that can support growth in Asia's third-largest economy.
The dividend distribution tax (DDT) for holding companies has been removed up to any level and the securities transaction tax (STT) rate has been kept same at 0.25%. The new code would also scrap cess and surcharge.
The bill will now be applicable from April 1, 2012, instead of the earlier proposed March 1, 2011. This delay, Mitra says will allow time for switchover.
