FM recasts Esops, hints at stable tax rates
P Chidambaram attributes inflation to increase in public expenditure and large capital inflows.
By INDIATIMES NEWS NETWORK |
NEW DELHI: In what seems to be a breather for the corporates, the finance minister P Chidambaram on Thursday recast the tax on Employee Stock Options (Esops). Fringe Benefit Tax will now be applicable on date of vesting.
Expressing concern over the price rise and attributed inflation to increase in public expenditure and large capital inflows. The savings story however, seems to be a success with rates touching 32.2% in FY'06. This is expected to keep the environment conducive for growth.
During the debate on the Finance Bill, the FM indicated the tax brackets recast may be linked to inflation and proposed to increase the tax-GDP ratio from 11.5 per cent in FY'06-07 to 11.8 per cent in FY'08.
The government is also looking at keeping tax rates stable and moderate. The tax exemptions however will be pruned further and phased out eventually.
The FM decided to continue with service tax on renting of commercial properties. The securities transaction tax rate also is there to stay. Excise duty on pan masala will continue at 45%.
However import duty on jems & jewellery has been completely abolished and duty on cut diamonds abolished. Also venture capital funds will get tax incentives on investments made in infrastructure projects. The export duty on iron ore finds has been slashed to 50%.
The FM will consider the tax incentive to hotel industry falling within Buddhist tourist circle.
The FM also announced excise duty cuts on cement that will bring down the cement prices by Rs 7 per bag. He also fixed 12% ad valorem duty for cement sold below Rs 190 per bag and continued the excise duty concessions for the same.
Revenue from cess & surcharge has been pegged at Rs 16,592 cr in this fiscal as against Rs 8973 crore in 07. The Centre will transfer Rs 2,48,844 cr to states as their share of taxes and duties.
Wholesale Price Index has been reported to be at 6.1% and Consumer Price Index stood at 12.8%.
Expressing concern over the price rise and attributed inflation to increase in public expenditure and large capital inflows. The savings story however, seems to be a success with rates touching 32.2% in FY'06. This is expected to keep the environment conducive for growth.
During the debate on the Finance Bill, the FM indicated the tax brackets recast may be linked to inflation and proposed to increase the tax-GDP ratio from 11.5 per cent in FY'06-07 to 11.8 per cent in FY'08.
The government is also looking at keeping tax rates stable and moderate. The tax exemptions however will be pruned further and phased out eventually.
The FM decided to continue with service tax on renting of commercial properties. The securities transaction tax rate also is there to stay. Excise duty on pan masala will continue at 45%.
However import duty on jems & jewellery has been completely abolished and duty on cut diamonds abolished. Also venture capital funds will get tax incentives on investments made in infrastructure projects. The export duty on iron ore finds has been slashed to 50%.
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The FM will consider the tax incentive to hotel industry falling within Buddhist tourist circle.
The FM also announced excise duty cuts on cement that will bring down the cement prices by Rs 7 per bag. He also fixed 12% ad valorem duty for cement sold below Rs 190 per bag and continued the excise duty concessions for the same.
Revenue from cess & surcharge has been pegged at Rs 16,592 cr in this fiscal as against Rs 8973 crore in 07. The Centre will transfer Rs 2,48,844 cr to states as their share of taxes and duties.
Wholesale Price Index has been reported to be at 6.1% and Consumer Price Index stood at 12.8%.
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