NSSF collections are down by 68% over last year. Investors are preferring banks, mutual funds and insurance policies for investments over the National Small Savings Fund. In order to deploy the surplus, the NSSF plans to lend Rs 1,500 crore to India Infrastructure Finance Company Ltd at 9 per cent interest. To save the fund from collapsing, the finance ministry included 5-year Post Office Time Deposits and Senior Citizens' Saving Scheme under Section 80C for tax exemption.
Some large companies said the measure would broaden and deepen the equity cult in the country, but feel that a blanket 25 per cent minimum public shareholding norm should not be applied indiscriminately to all companies. The ministry had floated the paper on February 1 and asked for public comments by the month-end. The minimum public shareholding limit now is 10 per cent.
The proposal, which will be one of the biggest capital market reforms in recent years if it is implemented, has been made by a Group on the Review of Issue Process, which is likely to submit a report on Thursday or Friday.
Transfer pricing legislation was introduced in India in 2001 and has emerged as the single biggest source of courtroom battles between Indian tax authorities and companies, a large number of which are multinationals with operations in India.
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.
Even as the debate over off-Budget liabilities continues, former finance ministry bureaucrats and leading economists say it's time the government went beyond the targets in the Fiscal Responsibility and Budget Management Act.
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.
The $100-million fund, which has the option to raise a further $200 million, will benefit small and medium enterprises engaged in defence production.
FM is considering extension of the sunset clause for housing projects in Budge 208-09.
The European Union has drawn up an initial negative list of 416 tradeable items on which it does not intend to provide duty cuts as part of the proposed free trade agreement with India
Demat of TDS certificates is likely to be deferred by a year or at least six months.
Move aimed at reducing tax exemptions ahead of Budget 2008-09.
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.
At present, the FDI limit for FM radio companies is 20 per cent. A senior Trai official has indicated that it could recommend an increase between 26 and 74 per cent.
India's booming mobile services market will see investments of over Rs 100,000 crore (around $24 billion) by 2010, the fastest investment ramp-up seen in any telecom market globally even as analysts predict a bruising battle that will see tariffs fall sharply.
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.
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