Taxpayers in lowest income slab to get minimum relief of Rs.980
NEW DELHI: Finance Minister P. Chidambaram on Wednesday refuted the charge that his budget proposals for the new fiscal have put an extra tax burden on India Inc.
Replying to a specific query at the post-budget press conference here, Mr. Chidambaram said, "There will be no additional burden on corporates," while pointing out that the entire focus of the budget was to benefit the common man for attaining "inclusive growth."
The objective, he said, was to contain inflation at about four to five per cent. "Nothing is being done to hurt the growth story which remains intact," he said and noted that the overall growth during the next fiscal was likely to be 9 per cent compared to an expected growth of 9.2 per cent during 2006-07.
On the issue of putting ESOPs (employee's stock options) under Fringe Benefit Tax (FBT), Mr. Chidambaram said that ESOPs were also fringe benefits extended mostly to top officials and a tax would have to be paid on such perquisites.
Explaining the impact of the hike in education cess on personal income tax, he said taxpayers in the lowest income slab would get a minimum relief of Rs.980, even after accounting for the additional levy.
On Minimum Alternate Tax (MAT), Mr. Chidambaram said the tax proposals, which was more like an advance tax, would not impose any additional burden on the corporate as they can take credit for the levy.
Turning to the dividend distribution tax (DDT), he said that the tax is to be paid by companies and a 2.5 per cent hike in the levy would not put any major burden on taxpayers, as most investors receiving dividend income are in the higher tax bracket.
On the effect of the excise duty cut in petrol and diesel, Mr. Chidambaram noted that it was done as part of the package agreed to with the Petroleum Ministry at the time of cut in oil prices earlier this month. As for cement prices, the impact of the excise changes was to reward those who sell cement up to Rs.190 per 50 kg bag by reducing duty from Rs.400 per tonne to Rs.350.Finance Minister's Budgetspeech - Full TextUnionGeneral Budget 2007-2008: Photo Gallery