Finance Minister P Chidambaram may introduce Controlled Foreign Companies rules to tax income from Indian-owned foreign subsidiaries. That means, irrespective of whether the income is brought to India or parked outside, Indian tax rates will be have to be paid on such income.
The empowered committee of state fnance ministers had recommended to the finance ministry that the Centre should provide direct budgetary support and transfer more services to states on account of the rate cut, sources said. States have refused to hike the value-added tax rate on more than 250 items like drugs, agricultural and industrial inputs from 4 per cent to 5 per cent to make up for revenue loss.
The proposal is being examined by the finance ministry in the run-up to Budget 2008-09. The banks have told Finance Minister P Chidambaram that there is a considerable divergence between the provisions made according to the RBI guidelines and the deductions allowed by the Income Tax Act.
FM is considering extension of the sunset clause for housing projects in Budge 208-09.
Demat of TDS certificates is likely to be deferred by a year or at least six months.
Professional sportspeople may soon have to pay at least 10.3 per cent as tax on their match fees and money for endorsing corporate logos on their apparel and other gear.
The finance ministry is considering a proposal to advance the due date for filing income tax returns by two months for all direct taxpayers, both salaried individuals and companies.
Interest income from investments in infrastructure bonds for sectors like power and roads among others may be exempted from income tax.
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 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.
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