DTC, which is currently being scrutinised by the Parliamentary Standing Committee, has suggested that the income tax exemption limit be hiked to Rs2 lakh from Rs1.8 lakh at present. It also proposes that the highest personal income tax rate of 30% should apply to annual income above Rs10 lakh, as against Rs8 lakh
New Delhi: The government is likely to provide some relief to individual income tax payers in the forthcoming Budget by raising the exemption limit to Rs2 lakh, as provided in the Direct Taxes Code (DTC), and hiking the slabs for different tax brackets, reports PTI.
The possibility of lowering the tax rates, however, is remote in view of the fiscal constraints being faced by the government, sources said, adding that the government will take on board some of the key recommendations of the DTC.
DTC, which is currently being scrutinised by the Parliamentary Standing Committee, has suggested that the income tax exemption limit be hiked to Rs2 lakh from Rs1.8 lakh at present.
It also proposes that the highest personal income tax rate of 30% should apply to annual income above Rs10 lakh, as against Rs8 lakh.
Finance minister Pranab Mukherjee will be unveiling the Budget proposals for 2012-13 sometime around mid-March.
The industry, too, is demanding that in view of high inflation, the income tax slab should be increased although the government may retain the existing tax rates.
CII director general Chandrajit Banerjee suggested that basic exemption limit should be increased from Rs1.8 lakh to Rs2.5 lakh for individuals.
“We have suggested that the income in the range of Rs2.5 lakh to Rs6 lakh should be taxed at the rate of 10%, whereas that in the next slab up to Rs10 lakh can be taxed at the rate of 20%. Above Rs10 lakh, it should be taxed at 30%,” Mr Banerjee said.
Ficci secretary general Rajiv Kumar said the government should incentivise people to come into tax bracket.
“Given the revenue constraints, the income tax rates for individuals may not be reduced. It is, however, imperative that the peak rate of 30% for such assesses be made applicable over an income of Rs10 lakh, against Rs8 lakh at present,” Mr Kumar said.
Assocham president Dilip Modi said the Budget should provide basic exemption limit of Rs2 lakh and the tax rate of 10% should apply to persons having income above Rs2 lakh and up to Rs5 lakh.
Calling for raising the tax exemption limit, PHD Chamber secretary general Sushmita Shekhar argued that it is necessary to increase disposable income and boost demand in the economy.
“India is a consumption-led economy. Role of private sector consumption in boosting the overall economic growth is immense,” she said.
“India has been grappling with a political gridlock and the government’s ability to implement measures to improve economic growth and fiscal prudence will be vital to boosting confidence,” S&P credit analyst Takahira Ogawa said
New Delhi: Global rating agency Standard and Poor’s (S&P) Monday warned that “the balance of risk factors” for India’s sovereign credit rating could tilt towards ‘negative’ zone this year, given the headwinds being faced by the country on domestic and global fronts, reports PTI.
However, S&P maintained that it does not expect to downgrade or revise its ‘stable’ outlook on the investment grade ‘BBB-’ long-term sovereign credit rating on India in the near future.
At the same time, S&P said, India is battling with high inflation, a weak government fiscal position, and slower economic growth on domestic front, while European sovereign debt problems could add to the pressures for the country.
“Like many countries, India is facing some challenges on a few fronts, and the balance of risk factors for the sovereign credit rating may be shifting slightly toward the negative,” S&P Ratings Services said in a report.
“Standard & Poor’s doesn’t expect to downgrade or revise the outlook on the long-term rating in the near future.
However, the negative factors, combined with the government’s weak policy formulation and implementation, may lead us to a tipping point,” S&P credit analyst Takahira Ogawa said.
“India has been grappling with a political gridlock and the government’s ability to implement measures to improve economic growth and fiscal prudence will be vital to boosting confidence,” Mr Ogawa said.
As per the report titled “Several Factors Could Weigh On India’s Current Stable Sovereign Rating In 2012”, high inflation, a weak government fiscal position, and slower economic growth have hurt investor confidence in the rupee, triggered a capital outflow, and weighed on the stable sovereign outlook on India in 2012.
“Our stable outlook on the ‘BBB-’ long-term rating on India currently reflects our expectation of strong economic growth in the medium term and gradually improving fiscal performances,” Mr Ogawa said.
He further noted that S&P has “factored in inflation and political uncertainty, which may lead to higher government subsidies and stalled reform efforts.”
At the recently held World Economic Forum (WEF) annual meeting in Davos, S&P president Douglas Peterson had said they have an investment grade rating with a stable outlook on India and the country is more likely to improve further on this.
Brushing aside the concerns of slow reforms and the perceived notion of ‘policy-paralysis’, Mr Peterson had said, “In a democracy, the policies are made after a prolonged dialogue and that is indeed a healthy practise.”
Apparently, impressed with the positive discussions about India, Mr Peterson went on to say that it was quite a refreshing change that the talks have moved away from the European crisis to India at Davos.
In a statement, the Team Anna member said the Prime Minister and the then Finance Minister is not justified in allowing a huge loss being caused to the country for saving the government and continuing in offices
Noted lawyer and Team Anna member, Shanti Bhushan has said that after the recent judgement by the Supreme Court, neither Prime Minister Dr Manmohan Singh nor Home Minister P Chidambaram should be allowed to continue to be in the office.
In a statement, Mr Bhushan, who is also former Minister of Law, said, "The Special Judge has held that Chidambaram agree with the then Telecom Minister A Raja to sell spectrum in 2008 at the prices determined in 2001 even though the market value of spectrum in 2008 was bound to be many times higher owing to the stupendous growth in the telecom sector between 2001 and 2008."
Last week, the Supreme Court, in its order on cancellation of 122 2G telecom licenses has asked the government to seek fresh recommendations from TRAI on allocation of licences and spectrum by way of auction. The apex court has given the government a time-frame of four months to complete the process.
"He (the Judge) also held that the then Finance Minister's act of granting permission to licensees to transfer its equity in favour of other companies at a very high price, even if contrary to the terms of the license also did not, per se, make him (Mr Chidambaram) a party to a criminal conspiracy with Raja," the statement said.
The special judge further pointed out that while there was clear evidence against Raja and others facing trial about their involvement in the criminal conspiracy, similar evidence was lacking against Chidambaram. “In the absence of any other evidence so far, the special judge may be right in his order rejecting Swamy’s (Dr Subramanian Swamy) plea for making Chidambaram a co-accused,” the statement added.
In every case of conspiracy, actionable evidence emerges only after an investigation by an empowered and independent investigation agency. “It may be noted here that the CBI cannot independently investigate against Chidambaram as the Home Ministry controls the transfers, postings, promotions, suspensions and disciplinary proceedings of the IPS cadre members of the CBI,” the lawyer said.
Talking about the Dr Singh's role in the episode, Mr Bhushan said, "It is clear that the Prime Minister came to know of the facts and could have prevented the grant of licenses at 2001 prices. He could have dropped Raja from the government. His defense that the constraints of coalition politics did not permit him to intervene is no defense at all. This only implies that if he had intervened, his government might have fallen.”
Here is the statement issued by Mr Bhushan...