Firms to seek simplified income tax laws in pre-budget meeting with Arun Jaitley
The Confederation of Indian Industry is likely to demand lowering of corporate tax rate to near 20%
New Delhi: Industry chambers will push for simplification of income tax (I-T) laws and calibrated phasing out of exemptions after lowering of corporate tax rate during their meeting on Wednesday with finance minister Arun Jaitley.
They will also press for effective steps and policy actions to improve ease of doing business with a view to promote growth. In their pre-budget consultation with Jaitley on Wednesday, the Confederation of Indian Industry (CII) is likely to demand lowering of corporate tax rate to near 20%, as against the intention of the government to bring it down to 25% from the present 30% in the next four years.
Assocham is likely to pitch for addressing policy gaps in existing provisions and enacting specific provisions to deal with key issues. Besides, it also wants the government to ensure that fine print does not undermine policy objectives and there is consistency in interpretation. Assocham is of the view that several existing provisions leave significant questions of policy (both substantive as well as procedural) unaddressed which lead to extensive litigation.
CII has already asked revenue secretary Hasmukh Adhia to consult the industry before finalizing the corporate tax road map. “With exemptions being proposed to be done away with, this would also obviate the need of MAT (minimum alternate tax). Eventually, there should be a very simple income tax act, which would be the biggest reform that can be brought about by the government,” the CII has said.
Jaitley in the fiscal 2016 budget had announced that corporate tax rate would be brought down gradually to 25% over the next four years and exemptions would be phased out. Although at present the corporate tax rate is 30%, the effective rate comes to around 22% because there is a large number of exemptions.
Accordingly, the revenue department in November unveiled the draft road map for phasing out of exemptions and invited public comments. Besides, the government has already set up a high-level committee under a former Delhi high court judge to suggest simplification of I-T laws. The committee would submit its preliminary report by 31 January, just in time for incorporating suggestions that need legislative approval in the budget for fiscal 2017.
Revenue secretary Hasmukh Adhia earlier said that a major cause of large-scale litigations is various exemptions and deductions given under the current I-T law. “We have already announced a road map for phasing out of such incentives over a period. When such exemptions are removed and tax law is simplified, litigations would come down further,” Adhia had said. PTI
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Business NewsPoliticsPolicyFirms to seek simplified income tax laws in pre-budget meeting with Arun Jaitley
First Published:5 Jan 2016, 11:40 PM IST
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