In a communication addressed to the finance ministry, Assocham president K P Singh said though a laudable provision was introduced in the Finance Act 1997 to avoid double/multiple taxation on dividend by making it tax free in the hands of recipient it has unfortunately failed to achieve the objective.On the contrary, the Assocham chief said, dividend continues to be double multiple taxed in the case of multi-layer investment companies which is the business compulsion.

The Companies Act, on the other hand, has similar provisions for amalgamation, arrangement or reconstruction of the companies, any such scheme approved by the High Court, after taking into account the views and objectives of the shareholders, creditors and the central government may be consideredfor exemption under the IT Act.

It is incorrect to assume that by restructuring, the companies resort to defraud the revenue department, the share holders or the creditors. Singh further suggested that the rebate which which is at present available on an investment of only Rs 60,000 with additional Rs 10,000 on infrastructure bonds need to be reviewed and should be enhanced to Rs 1 lakh with an additional investment of Rs 25,000 on infrastructure bonds.

Further, the present rebate of 20 per cent on the total investment be increased to 25 per cent. He said. The interned ceiling of Rs 10,000 with regard to repayment of housing loans, expenditure on acquisition of house property be deleted. He said in a statement here.