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Two Indians among those killed in Russia plane crash
New Delhi : Two Indians are among those killed in the FlyDubai plane crash in the Russian city of Rostov-on-Don, Ministry of External Affairs spokesman Vikas Swarup said on Saturday.
 
He said the Indian embassy in Moscow got this information from the list put out by the Russian authorities.
 
Swarup said the two Indians that appear on the list are Anju Kathirvel Aiyappan and Mohan Shyam.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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How 52,911 profitable Indian companies pay nil tax
"Why is it that subsidies going to the well-off are portrayed in a positive manner? Let me give you an example. The total revenue loss from incentives to corporate tax payers was over Rs.62,000 crore... I must confess I am surprised by the way words are used by experts on this matter. When a benefit is given to farmers or to the poor, experts and government officers normally call it a subsidy. However, I find that if a benefit is given to industry or commerce, it is usually an incentive or a subvention." -- Prime Minister Narendra Modi, February 15, 2016, Delhi.
 
So effective have some incentives been that companies making larger profits are now paying a lower rate of effective tax, reveals my analysis of national tax data over five years, specifically, the Statement of Revenue Impact of Tax Incentives under the Central Tax System.
 
Effective tax rate is the tax rate actually paid by companies on profits, calculated as tax actually paid divided by profits before tax. For instance, the effective tax rate for a company making a profit up to Rs.1 crore was 29.37 percent; while the corporate tax rate was 22.88 percent for those with profits greater than Rs.500 crore in 2014-15.
 
This means companies making smaller profits are competing in an unequal environment against bigger companies with substantial taxation benefits, with the gap in effective tax rates widening over the years.
 
In 2014-15, as many as 43.6 percent Indian companies made losses, 3 percent companies made no profit and 47.4 percent of the companies made profits up to Rs.1 crore, the data for 2014-15 show. Less than 6 percent of India’s companies recorded profits in excess of Rs.1 crore, according to the data. In addition, the proportion of loss-making companies has grown between 2010-11 and 2014-15. 
 
Tax rates can even drop from 21.94 percent to 1.53 percent. As many as 52,911 companies made profits in 2014-15 and had nil effective tax rates or, in some cases, even below.
 
This happened because government incentives led to large declines in the effective tax rates for financial-leasing, sugar, cement, steel, mining contractors, power and energy, consultancy and paper companies. 
 
In addition, the companies also used an accounting trick called as accelerated depreciation that allows for greater deduction in the price of an asset during its earlier years to reduce their effective tax rates.
 
Effective corporate tax rates for these industries were slashed from 2010-11. Consider finance-leasing companies, which provide assets (equipment, vehicle, software) on lease. Their effective tax rate fell from 21.94 percent in 2010-11 to 1.53 percent in 2014-15.
 
Similarly, the effective tax rate of consultancy services declined from 34.29 percent in 2012-13 (the peak value over the last five years) to 15.88 percent in 2014-15.
 
Tax rates are generally kept low when the government wants to increase supply and overall industry size or when the government wants to support industries in difficulty. Many industries have passed those support phases. 
 
In 2015-16, India is expected to have produced excess sugar for its sixth consecutive year. Similarly, a global slowdown has led to an oversupply of cement. Yet, these industries have benefitted from falling effective-tax rates.
 
Had the effective-tax rates on some of such industries been the same as the 2010-11 rates, additional cumulative tax collected over the last four years from them would have totalled Rs.39,000 crore. This is based on an assumption that the tax rates would have had no impact on the profits before tax.
 
Public companies paid higher effective tax rates (25.03 percent) than private companies (23.36 percent) in 2014-15. Finance Minister Arun Jaitley, in his budget speech last February, said the government would phase out tax exemptions and deductions, a move that would bring clarity to the tax regime.
 
While effective tax rates rose between 2012-13 and 2014-15, many exemptions remain, especially for larger companies.
 
For instance, corporates have a statutory tax rate of 33.84 percent, which they must pay on profits. However, the effective tax rate in 2014-15 was 24.67 percent. Although this rate is higher than it was in 2013-14 (23.22 percent), incentives to companies still cost the government thousands of crores.
 
The government provided the corporate sector Rs.65,067 crore in tax breaks or exemptions in 2014-15 and is expected to forego Rs.68,710 crore in 2015-16. Compare this with the money set aside for agriculture and farmers’ welfare, Rs.35,984 crore, and the Mahatma Gandhi National Rural Employment Guarantee Scheme, Rs.38,500 crore.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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COMMENTS

Vikas Sivaraman

8 months ago

We need tax reforms precisely to adress thee anamolies in taxation.

Gopalakrishnan T V

9 months ago

The accounts are fudged as dictated by the Companies' managements in such a way that companies show heavy losses or marginal profits.Unfortunately, the accountants, lawyers and the authorities show more loyalty to the Companies and help them to avoid payment of taxes.

J Pinto

9 months ago

This "strong" "nationalist" Government deliberately slept and allowed Vijay Mallya to flee from his 9000 crore debt to PSU banks.

This means higher taxes required from the aam admi ?

J Pinto

9 months ago

Should government tax the private sector more to support loss making PSUs like Air India and the banks?

Is the objective not to create a larger pie so that everyone can have a bigger slice?

Is the government the best user of the profits ?

Accelerated depreciation is not "an Accounting Trick". It is meant to encourage investment in new capacity that is more capital investment. It can back-fire through when excessive capacity is created and a lot of it lies idle.

PRABIR KR SINHA

9 months ago

RTI Act is a very good act for the nonpolitical persons. But the govt employees specially the state govt employees are very much reluctant to give the reply of queirry specially where the political leaders may exposed with the reply.
I think Modi govt must give more and more importance for quick, proper reply of every RTI questions.
p.k.sinha

Parimal Shah

9 months ago

This is due to the crony capitalism practiced by the erstwhile governments, mainly Congress, to fill up their own pockets and creation of black money that is sent and kept in tax heavens.
Modi government must now undo those idiotic and undesirable practices and do justice to the common man by withdrawing all such subsidies to the rich in the form of incentives and subventions and what not.
This will ultimately benefit the common man on the street.
-Parimal

KAVIRAJ B PATIL

9 months ago

The article would have been better if a lot more statistics had been provided by the author with examples of some top companies getting this benefit.

Suketu Shah

9 months ago

Great article.

Twitter's 140-character limit to stay: CEO Jack Dorsey
New York : If you thought you will be able to convey more to your friends and policymakers on Twitter soon, hold on. According to the micro-blogging site, there is still time for you to tweet in 10,000 characters and its original 140-character limit is here to stay.
 
Appearing on a TV show, Twitter CEO Jack Dorsey said that the 140-character limit is "a beautiful constraint" and that Twitter "will never lose that feeling".
 
"It's (140-characters) staying. It's a good constraint for us, and it allows for of-the-moment brevity... We're changing a lot. We're always going to make Twitter better," he was quoted as saying in a Tech Crunch report on Saturday.
 
Earlier in January, media reports said that Twitter is building a new feature that will allow users to tweet longer than its traditional 140-character limit.
 
The company is currently considering a 10,000-character limit, recode.net reported, adding that Twitter may launch this feature toward the end of the first quarter.
 
This is the character limit the company uses for its Direct Messages product.
 
According to the report, it is also possible that the 10,000-character feature may change before it is finally rolled out.
 
"Twitter is currently testing a version of the product in which tweets appear the same way they do now, displaying just 140 characters, with some kind of call to action that there is more content you can't see," recode.net said, quoting sources.
 
Clicking on the tweets will then expand them to reveal more content.
 
The 140-character limit has been around as long as Twitter has and has become part of the product's personality.
 
Twitter is also working on the idea of changing its reverse chronological timeline.
 
The micro-blogging site is experimenting with a Facebook-type way of sorting your timeline where tweets are sorted by relevance and not in reverse chronological order as it happens now.
 
According to motherboard.vice.com, Twitter is working with algorithms similar to the ones Facebook uses to order items on your news feed.
 
"This is an experiment. We're continuing to explore ways to surface the best content for people using Twitter," a company spokeswoman was quoted as saying.
 
Twitter has been hinting towards an algorithmic-driven news feed for more than a year.
The test is part of Dorsey's promise for bold changes to Twitter to help get it out of its slow growth
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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