TIOL-DDT 282 · the untouched capture
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <b><font color="#663399" size="3">TIOL-DDT
282</font><br>
13 01 2006<br>
Friday</b></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>FBT
to stay</b></font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now it is confirmed
that the Fringe Benefit Tax is here to stay in spite of strong opposition
from India Inc. The FM is not known for changing his views easily and all
the efforts of the industry leaders obviously failed with the FM only agreeing
to simplify the procedure. Corporates have been complaining that the compliance
cost of FBT was quite high and some of the taxable items were genuine business
expenditure. The FM is expected to net a cool 4000 Crores in this financial
year from FBT. Corporate leaders had suggested a hike in corporation tax instead
of the FBT but the FM says taxing perquisites is a universal practice, as
it ensures both vertical and horizontal equity. But there seems to be another
benefit not exactly fringe for the government. Once the corporates start reducing
benefits to the employees and giving them more salaries instead of perks,
the higher salaries will become taxable and the Government’s income
tax is sure to go up. We really have a financial wizard up there as Finance
Minister.</font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">
<b>Customs wins Oracle award</b></font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Indian Customs
has won the Oracle award – “Oracle Excellence in e-Governance
Award”. Customs is among the 22 awardees which include some state government
projects of Andhra Pradesh, the Indian Judiciary and they all are based on
Oracle Systems. The Indian Customs is one of the oldest licenced users of
Oracle.</font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">
<b>Trade Unions’ wish list to FM</b></font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Leaders of major
trade unions had met the Finance Minister and suggested the following:- <br>
<br>
++ Comprehensive legislation for Social Security for agricultural and unorganised
labour.<br>
<br>
· Appointment of the Sixth Central
Pay Commission.<br>
<br>
· Enhancement of the exemption
limit for personal income tax to Rs.2 lakhs.<br>
<br>
· Restoration of interest rate
for EPF to 9.5 per cent (as against 8.5 per cent announced by the government).<br>
<br>
· No disinvestments in profit making
central sector enterprises.<br>
<br>
· Removal of all Ceilings on bonus.<br>
<br>
· Enhanced 9 per cent interest
on senior citizens’ savings accounts.<br>
<br>
· No passing on of Fringe Benefit
Tax to employees.<br>
<br>
· Imposing a ban on iron ore exports
to protect domestic iron and steel industry.<br>
<br>
· Encouraging employment in SSIs
and self employed sectors through enhanced credit.<br>
<br>
· Setting up Workers Capital Trust
to manage part of the worker’s funds such as provident fund.<br>
<br>
· Encouraging distribution of equity
to workers.<br>
<br>
· Making highly profitable industries
pay more taxes.<br>
<br>
· Recovering a part of non-performing
assets of the banking sector.<br>
<br>
· No privatisation of airports.<br>
<br>
· Encouraging permanent rather
than contractual employment.<br>
<br>
· Enhancing tax/GDP ratio and investment
GDP ratio further.<br>
<br>
· Increasing import duties on luxury
and consumer goods.<br>
<br>
· Introducing a tax on agricultural
income for farmers with adequate irrigated land holding.<br>
<br>
· Imposing taxes on lavish spending
on social ceremonies such as birthdays and weddings and on service incomes.<br>
<br>
· Strengthening the public distribution
system.<br>
<br>
· Maintaining fertilizer subsidy.<br>
<br>
· Allocation of at least 10 per
cent of budget on education.<br>
<br>
· In line with the Rural Employment
Guarantee Scheme, launching another programme for urban areas.<br>
<br>
· Not investing pension funds in
the share markets.<br>
<br>
· No structural adjustment loans
from the World Bank.<br>
<br>
· More public investment in rural
areas, agriculture and social sectors.</font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <b>Ingredients
for a dream budget?</b></font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <b><font color="#663399">Opportunity
is as scarce as oxygen; men fairly breathe it and do not know it</font></b>.<br>
<br>
<font color="#FF6666"><b>Until Monday with more DDT<br>
<br>
Have a nice Weekend.<br>
<br>
Mail your comments to</b></font> <a href="vijaywrite@taxindiaonline.com">vijaywrite@taxindiaonline.com
</a></font> </p>
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