Do away with tax barriers for financial sector in budget: CII

NEW DELHI: Advocating an investment, focused budget for 2009-10, industry body CII has asked the government to do away with various tax barriers for the financial sector.

CII has also sought bringing in private sector banks at par with their public sector peers in terms of tax benefits provided during their merger.

Besides, in its recommendations made to the Finance Ministry for Union Budget 2009-10, CII has asked the government to allow tax deduction for provisions made in respect of the NPAs of the banks and NBFCs.

It further said derivative trading activities undertaken by banks and financial institutions should be treated at par with other business activities for the purpose of Income Tax Act.

In a proposal concerning investments in Portfolio Management Schemes, CII has recommended that income of an investor who engages a professional discretionary portfolio manager registered with SEBI should be booked as capital gains and not business income.

To reduce the voluminous processing of forms by the IT department and ensuring that the tax benefit is received by banks inspite of non receipt of TDS certificates from its borrowers/customers, banks be granted exemption from TDS.