sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
Latest Expert Exchange
« News Headlines »
 3rd instalment of advance tax due on 15 December
 Tax on your gold and real estate investments
 Securities and Exchange Board of India (Mutual Funds) (Third Amendment) Regulations, 2018
 Have you filed your income tax? Remember these deadline nears; know from TDS, TCS to challan, forms
 Notification No. 96/2018 -Central Board Of Indirect Taxes And Customs
 Here’s how you can check your ITR refund status online
 Your tax form will be filled by the taxman Income tax return (ITR) filing
  Section 24 and Section 56 of the Banking Regulation Act, 1949 - Maintenance of Statutory Liquidity Ratio (SLR)
  Companies (cost records and audit) Amendment Rules, 2018
 Income tax, TDS rules explained in 10 points EPF withdrawal
 CBIC extends due date for filing of FORM GSTR-7 for the months of Oct to Dec till Jan 31st 2019

Open-end tax breaks may get the axe
January, 29th 2007

The government is likely to target open-ended tax exemptions by stipulating a time period for their conclusion in the forthcoming Budget. In an exclusive interview with ET, finance minister P Chidambaram rued the proliferation of exemptions in Indias tax laws. He conceded that the government is obliged to keep many time-bound exemptions for a period. But there are many open-ended exemptions too, he said, signalling that these would also have to be phased out, sooner or later.

Tax exemption is a complex problem. We are committed to reviewing all exemptions. That is why we have put them on our website. We want a healthy debate on exemptions. Every tax exemption has a strong constituency behind it. The question is which constituencies you can take on. We are looking at that. Our approach is simple: some tax exemptions must go. In any event, new ones must not get grafted to the tax code. Every new budget proposal from any constituency talks of an exemption. We have to resist giving new ones, he told ET.

Mr Chidambaram admitted that the SEZ policy was one big exemption. But we had argued against the tax exemptions in SEZs and lost the battle. 80 HHC, which gave an income tax break on export profits, is now back through SEZs. This exemption had been phased out.

MAJOR tax exemptions to corporates cost the government Rs 57,852 crore in 2004-05. Corporates, for instance, enjoy two kinds of open-ended exemptions. One, where the exemption is perennial. Two, where the exemption is for a finite period but companies are free to claim it at any point of time. The tax deduction available to companies under a section in the Income Tax Act known as 80 G falls in the first category.

Companies can claim a tax deduction on donations to charitable trusts and institutions under this section. Similar tax breaks are given for donations to political parties under Section 80 GGB. The second category of open-ended exemptions include tax holiday available to infrastructure service providers under Section 80 IA of the Income Tax Act.

Companies that develop, operate and maintain infrastructure facilities can claim full deduction on the profits for the first ten years. Roads, water supply, port, airport, inland waterway, water treatment, irrigation, sanitation and sewerage and solid waste management feature in the list of beneficiary infrastructure facilities. The exemption has no termination date set for it, unlike in the case of investment in the power sector, where a developer cannot commence claiming the 80IA benefit after March 31, 2010.

Similarly, a deadline has been fixed for industrial parks as well. Tax breaks are also given under a Section known as 80 IB of the IT Act to companies engaged in the commercial production or refining of mineral oil anywhere in India. A full tax holiday is available for seven years, whenever it is commissioned.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2018 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Contact Us

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions