Interest income from investments in infrastructure bonds for sectors like power and roads among others may be exempted from income tax.
Weights of the fuel group are set to rise in the revised Wholesale Price Index.
Riding on a buoyant economy and better tax compliance, gross tax revenue collections are likely to surpass the Rs 6,00,000 crore (Rs 6000 billion) mark in 2007-08. In other words, tax revenue is expected to double compared with Rs 3,04,958 crore (Rs 3049.58 billion) in 2004-05.
Taxi and bus fleet owners and contractors providing raw materials, electrical work and furniture in civil construction are likely to come under the presumptive income tax net from 2008-09.
The committee on financial inclusion, headed by C Rangarajan, the chairman of Prime Minister's Economic Advisory Council, has recommended that the profits transferred to their reserves by such banks should be exempted from tax till the banks achieve the standard capital adequacy ratio (CAR).
The finance ministry is considering this move on account of better levels of tax compliance and the ongoing buoyancy in direct tax collections, a senior government official told Business Standard. The surcharge, a sort of "tax on tax" is paid by 2-3 million, of the total 31.9 million assessees who are liable to pay tax.
The reason for the largesse, a first in the revenue department, is on account of direct and indirect tax collections exceeding the target (Budget estimate) for 2006-07. Total revenue collections stood at Rs 470,987 crore (Rs 4,709.87 billion) for the year, against the targeted Rs 439,952 crore (Rs 4399.52 billion).
This 20 per cent increase will allow a taxpayer to save up to Rs 2,000 in taxes every year, a senior government official said.
Despite increasing loan disbursements in the last three financial years, the number of farmers who were financed by banks have declined considerably.
She had shown some cash and other assets as gifts from party men "given to her out of love and affection", an argument the department rejected.
This is an initial assessment, but the actual loss to insurers will be known after the fire is completely doused and claims start pouring in.
Under this scheme, North Block may waive both interest and penalty for defaulters and an announcement to this effect is expected in Budget 2008-09 due next month, according to a senior finance ministry source.
Mumbai leads the list of cities with highest tax collections, say the tax figures of the first nine months of this fiscal.
FM is likely to introduce tax return prepares scheme for small service tax payers in the upcoming budget.
The likely relaxation, however, will not apply to foreign banks.
From April 1, individual and corporate taxpayers who pay Rs 50,000 and more as tax in a single payment, may have to make the payment electronically. A formal announcement to this effect from the Central Board of Direct Taxes is expected shortly, finance ministry sources confirmed.
The finance ministry is expected to announce the abolition of tax deducted at source (TDS) on corporate bonds in Budget 2008-09, official sources told Business Standard.
Come April 2008 and Delhi will become the first state in the country to do away with printed "stamp paper", which is currently mandatory for property-related documentation.
Petroleum products such as crude, motor spirit and diesel, and alcohol beverages will be kept outside the dual goods and service tax (GST) structure, which will be implemented from April 2010.
Besides central cess, the Empowered Committee of State Finance Ministers has also recommended to keep purchase tax and octroi, which are collected at state and local levels, outside the GST framework.
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