No more tax sops, or cuts -- Yashwant Sinha

No more tax sops, or cuts -- Yashwant Sinha
ENS ECONOMIC BUREAU

NEW DELHI, FEB 14: Though he's given no indication of what fresh taxes the budget may hold, Finance Minister Yashwant Sinha today made it clear that there would be no further cuts in income tax rates. Nor would there be any other sops such as an increase in the standard deduction, or hikes in deductions for insurance and such payments. Corporates, however, he said enigmatically, would be pleased with some of the changes he was planning in corporate taxes.

The finance minister stated that the direct tax rates (for individuals) in India are among the lowest in the world. "Since the rates are reasonable we should have moderations in asking for exemptions", Sinha added.

Inaugurating the 80th Annual General Meeting of Assocham, Sinha, however hinted at a direct taxes package in the coming budget that would please trade and industry and facilitate growth. "There are issues on direct tax on which we are applying our mind", Sinha said, with hinting on the kind of package that could be expected.µ Commenting on the efforts of his predecessor in the finance ministry to put in place a reasonable income tax rate structure, Sinha said "my predecessor has cleared up the direct tax rates, and except for surcharge rates I have not interfered, because I find it reasonable".

Sinha also ruled out any cuts in the excise rates as demanded by industry associations. According to the FM, it would be wrong to expect the government to peg the excise duty rate at 8 per cent which had been allowed only in special cases. "There is no 8 per cent and the basic excise rate is only 16 per cent", he said adding the ultimate salvation lies in transformation to a full value-added tax system.