INDIA INC EXPECTS TAX FOR SUPER- RICH IN BUDGET Top leaders of corporate
India think Finance Minister P Chidambaram would take steps to tax the
super- rich, introduce goods and service tax and raise tax rebates on
home loans in the coming Budget, a survey has shown. A majority of them,
however, don't expect the FM to take any steps on inheritance tax.
According to a survey of chief executive officers, chief financial
officers and other top officials of 300 companies by consulting firm
Grant Thornton, 70 per cent of respondents expect the finance minister
to introduce measures to widen personal income tax deductions,
especially in home loans under section 80C of the Income Tax Act.
"Considering the increasing efforts of the government to widen the tax
base, there is asense that the government may levy a super- rich tax on
exceptionally high earning income group," said Grant Thornton. Sixty-
two per cent of the respondents said the superrich tax will be levied in
the Budget. Almost 48 per cent of the respondents said the Budget will
be investorfriendly, while another 40 per cent expect it to be
revenuefriendly. While 83 per cent of respondents do not expect major
changes in the corporate taxation rates, they expect increase on the
limits of tax savings investments especially linked to housing loan and
principal repayments, the survey says. Amidst new proposals, India Inc
expects the government to clarify its taxation stand on " indirect
transfers" like the Vodafone case and clarity on domestic transfer
pricing regulations. In recent years, many top Indian and multinationals
have received tax demands on transfer pricing. While multinational
energy firm Shell has received a tax notice for notional gains while
investing in its 100 per cent subsidiary in India, many Indian companies
have received notices for earning a notional guarantee fee while giving
guarantees to the special purpose vehicles set up for acquisitions
abroad. - www.business-standard.com