The final draft, expected by June 15, may propose slapping 30% tax on any income above Rs10 lakh per annum
People with more than Rs10 lakh annual income may not get the tax relief originally proposed in the Direct Taxes Code (DTC), as the finance ministry is for tweaking slabs across the board to offset concessions elsewhere, reports PTI.
Under the first draft of DTC—which when implemented will replace the archaic Income Tax Act, 1961—income of Rs10 lakh to Rs25 lakh was to attract tax at the rate of 20%, but the final draft expected by June 15 may propose slapping 30% tax on any income above Rs10 lakh per annum, according to sources.
This is to make up for the possible concessions the ministry may extend in other areas like exempting long term savings from tax at the time of withdrawal and the way Minimum Alternate Tax (MAT) is calculated, sources said.
As such, the relief on highest tax slab would not be much, since under the present regime too, 30% tax is imposed on income of more than Rs8 lakh a year.
Sources said the ministry is reworking the August 2009 draft following feedback from stakeholders. Under this, the 10% tax proposed on income up to Rs10 lakh may now stand scaled down to Rs 5 lakh a year.
And income of Rs5 lakh-Rs10 lakh a year would attract 20% tax, although the first draft proposed slapping this rate on Rs10-25 lakh income.
However, the threshold level of income that is exempt from tax may be raised to Rs2 lakh from Rs1.6 lakh at present. The first draft had proposed retaining the threshold limit at Rs1.6 lakh.
Sources said the government has to generate tax revenue for meeting its expenses and it might yield to the "genuine" demand of MAT being imposed on book profits rather than on gross assets as suggested in the first draft.
"Gross assets also include the debt portion of a company and it is highly illogical to tax debt," said a source.
MAT is a tax imposed on profit making companies who do not fall under any tax because of various exemptions.
Further, the ministry might also agree to retain the current provision of following exempt-exempt-exempt (EEE) model for long term savings like provident fund and pension, instead of changing to exempt-exempt-tax (EET). The EET model implies that tax would be imposed on long-term savings at the time of withdrawal.
On tax exemptions on home loans, on which the first draft is completely silent, sources said that there might be no rebates in the second draft as well, since the individual tax exemption limit on savings like insurance and others is proposed to be hiked to Rs3 lakh from the current Rs1 lakh.
"This more than compensates" for doing away with tax rebates on the housing loans, the source said.
The final draft would be open for feedback from various stakeholders for 15 days, after which the ministry would put it up for the Cabinet's approval before taking it to Parliament.
Earlier, in the budget for 2010-11, the government had widened the tax slab so that tax of 30% falls on income above Rs8 lakh, 20% on Rs5-Rs8 lakh and 10% on Rs1.6 lakh-Rs5 lakh.
Japanese automaker Honda is rapidly gaining grounds in India either on its own or through its joint venture and has replaced incumbent TVS Motor from third spot in motorcycles category
Honda Motorcycles & Scooter India (Pvt) Ltd (HMSI), a unit of Japanese Honda Motor Co Ltd, has emerged as the third largest motorcycle seller in the country, replacing TVS Motor Co Ltd. The only thing that saved TVS Motor from losing its third position in overall two-wheeler ranking is mopeds, where no other company has a presence at the moment.
During April, HMSI sold 58,041 units in the motorcycle category compared with TVS Motor's 49,008 units. Similarly, in scooters, HMSI, the current leader, surged ahead with 71,477 units while TVS Motor sold 25,159 units. In the mopeds category, TVS Motor sold 51,829 units compared with 40,915 units a year ago.
However, in the scooters category, HMSI is still feeling the effects of last year's workers strike and has an active waiting list. This probably has given newcomers such as Mahindra Two Wheelers Ltd and Suzuki Motorcycle India Ltd, a chance to increase sales. During April, Mahindra Two Wheelers reported total scooter sales of 9,009 units from 1,609 units while Suzuki Motorcycle sold 19,893 units of scooters compared with 8,129 units a year ago.
Earlier, while speaking with reporters, Shinji Aoyama, president and chief executive, HMSI, said that the company expects to keep its leadership in scooters but want to expand in motorcycles and by FY12 sees motorcycles sales exceeding scooters. He said until HMSI's new plant starts production, there is a limitation on production of scooters.
With an aim to penetrate the scooters market further, TVS Motor launched ‘TVS Wego’, its new 110cc scooter, in Pune and Nagpur. Over the next two months, the metal-bodied scooter with unisex styling will be made available across the country.
Hero Honda Motors Ltd, in which Honda Motors holds 26% stake, continued its leadership position in the overall two-wheeler category, despite a marginal decrease in April due to supply side constraints. Due to a shortage of batteries, the company could not dispatch about 50,000 units during April and expects the problem to be sorted out by second week of May. Bajaj Auto Ltd also maintained its second spot with robust motorcycle sales. Bajaj Auto's motorcycle sales grew 84.4% led by variants of its popular ‘Pulsar’ and ‘Discover’ brands.
While Honda is gaining ground rapidly in India either on its own or through its joint venture, the other Japanese automaker Suzuki is finding it difficult to make inroads in two-wheelers despite a strong brand image. The company's unit, Maruti Suzuki India Ltd is the country's largest carmaker. While Suzuki Motorcycle reported higher sales in the scooters category, in the motorcycles category, its sales tumbled over 65% to 1,834 units from 5,356 units, in the same month last year.
"Automobile sales continued to remain upbeat in April 2010 on a year-on-year basis on account of a low base of the corresponding month of the last year and the prevailing healthy demand environment. However, the automobile companies, except for Bajaj Auto, failed to log in a sequential sales growth compared to March 2010 mainly due to a marginal slowdown that traditionally happens in April of every year," said Sharekhan Ltd in a note.
After sales declined by about 89% during FY10, electric two-wheelers failed to get a single customer in April 2010, raising questions about their future.
(Read more http://www.moneylife.in/article/8/5285.html)
TRAI, on Tuesday, had suggested that operators pay an additional one-time fee for holding spectrum beyond 6.2 MHz
The government today said telecom companies would be heard before a decision is taken on the Telecom Regulatory Authority of India’s (TRAI) recommendations on spectrum related issues, including levying a one-time charge for excess air waves, reports PTI.
"It will be deliberated in the ministry, thereafter due process will be taken up...It is necessary before taking any decision through the Telecom Commission. If necessary, patient hearing will be given to the stakeholders," minister A Raja told reporters in New Delhi.
TRAI, on Tuesday, had suggested that operators pay an additional one-time fee for holding spectrum beyond 6.2 MHz.
If implemented, this will be a big blow to GSM players like Bharti Airtel, Vodafone Essar and Idea Cellular that have well over 6.2 MHz of spectrum and will have to cough up more to retain the additional radio waves.
Bharti and Vodafone had termed the TRAI proposals as "arbitrary and shocking", while Idea Cellular said the recommendations had "impressions of crony capitalism".
Telecom stocks were battered following the TRAI proposals in anticipation of their balance sheets being hit by huge payout by operators.
On the ongoing third generation (3G) auctions, Mr Raja said the bidding should be completed within a couple of days.
"(It should be completed) within a couple of days, it has to close but people are bidding. Let us see. It has to take its natural course."
Asked about the revenue the government expected to collect, Mr Raja said bidding is still going on and it is difficult to project revenues at this stage.