New Delhi, Mar 1 (UNI) Professional body Institute of Chartered Accountants of India (ICAI) has termed Union Budget 2008-09 as "a relief-oriented budget" as it skillfully balanced the need to step up economic growth, check inflation and also address the socio-economic needs of the nation.
In a statement here yesterday, ICAI said that consequently large allocations has been made by Finance Minister P Chidambaram, to education and health sectors to stimulate economic growth and address the problems of farmers.
It also welcomed the proposal to make PAN integral in all financial transactions in the securities market to bring transparency in the capital markets and ensure increased tax compliance as also monitoring the spending of the budget allocations.
"This is an improvement on the outcome budget and the Institute fully supports the evolving of any system, which will properly account for the public expenditure," ICAI noted.
Regarding concessions given on individual taxation, ICAI said it has always favoured applying the maximum marginal rate on a much higher income limit and also approved the rationalisation of the maximum marginal rate of 30 per cent applicable to incomes above Rs 5 lakh. "Similar benefit had not been extended to the corporate sector," it said adding that however, a tax holiday for health care and tourism was a good proposal.
On changes in the securities transactions tax and short term capital gains, it said this will increase the tax impact.
Concessions on the FBT front such as removing creche facility, sponsorship for employees, guest house facility and organisation of sports events from its ambit will help in removing anomalies and promoting employee welfare.
It said the Finance Minister has accepted various recommendations made by the body such as advancing the date of filing of income tax returns from October 31 to September 30 for those tax payers who were required to get their accounts audited, as also not to tax the dividend distribution in the hands of the holding companies.
It said introduction of commodity transactions tax was a logical step on the lines of security transactions tax and would bring transparency and was happy at the withdrawl of banking cash transactions tax.
Regarding indirect taxes, across-the-board cut in CENVAT and in specific consumer items will help in containing inflation and also promote domestic industry. It also favoured enhanced threshold exemption of Rs 10 lakh for small service providers, proposed rationalisation of the central sales tax and extension of TUFF schemes with a higher outlay as benefitting the textile industry.
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