IMC urges Union Govt to end tax exemption to rich farmers

By Staff
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Google Oneindia News

Mumbai, Nov 22 (UNI) The Indian Merchants Chamber (IMC) has urged the Central Government to restrict the tax exemption limit granted on agricultural income to Rs 30,000 only.

In a pre-budget memorandum on direct taxes submitted to the Union Finance Minister, the IMC said ''There is no justification for not taxing rich and big farmers.'' ''Besides, this amendment would also plug an existing loophole wherein non-agriculturists converted their black money into white money by claiming higher than real agricultural income,'' they said.

Other demands raised by the IMC included the limit provided in case of persons carrying on business should be increased from the present level of Rs 40 lakh to Rs 100 lakh and in case of persons carrying on a profession, the same should be increased from the present level of Rs 10 lakh to Rs 25 lakh.

The Finance Act, 2005 made an amendment in section 43(5) providing for the transaction of trading in derivatives in Stock market should not be deemed to be a speculative transaction if, the conditions of the amended provisions were complied with. Therefore, an appropriate amendment should also be made in section 43(5) with regard to derivatives transaction relating to commodities.

Long-term capital gains should not be included in the definition of the Book Profit for the purpose of Minimum Alternative Tax (MAT).

In any case, long-term capital gains exempt under the Income Tax Act should not be included in Book Profits for MAT.

The government must delete Section 2(22) (e) regarding 'deemed dividend' as a measure of rationalization and simplification.

Fringe Benefit Tax (FBT) under Sec 115 WB was introduced to tax expenditure incurred by employees which cannot be taxed in their hands. Imposition of FBT on expenditure incurred by persons other than employees such as partners of the firms, non-executive Directors of a company and expenditure incurred by professionals on behalf of their clients is very unreasonable. Therefore, expenditure incurred by persons other than employees should not be considered for the purpose of levy of FBT.

The IMC yesterday pointed out that there is no reason why an assessee needs to file two separate returns - one for IT and the other for FBT - when both components of the tax can be assessed and collected under the existing system of IT. Therefore, the provision regarding separate advance tax payments of FBT and separate assessment and collection must be done away with, they added.

UNI PVN WD NV1228

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