Chambers Hail Changes In Finance Bill

Chambers have welcomed the amendments to the Finance Bill 2000 saying these would give the vital push to the knowledge-based industry.

In a statement issued here yesterday, Federation of Indian Chambers of Commerce and Industry (Ficci) president G P Goenka, expressed optimism that Finance Minister Yashwant Sinha would also consider reviewing the decision taken in the case of dividend tax in order to accelerate the process of economic recovery.

Ficci is also looking forward to proactive steps for corporate restructuring such as reduction in the stamp duty, easy demergers, relaxation in amalgamation etc.

CII president Arun Bharat Ram said that while the announcement in the budget to adopt the "Pass Through" principle for venture capital funds was excellent, "it did not have the desired effect because of the 20 per cent tax on redemption."

 

This had the effect of choking off venture capital funds planning to set up base in India and was encouraging the Mauritius route. "With these announcements made yesterday by the FM, the venture capital funds would be incentivised to set up base and operate from India," Bharat Ram said.

An Assocham release issued here yesterday said that quite a few suggestions made by Assocham in the post-Budget memorandum have been accepted -- especially regarding taxation of ESOP only at the point of sale and not as a perquisite. It also noted the suggestions on not to tax venture capital funds for income distributed, to hike the tax deduction limit on housing interest up to Rs 1 lakh and phasing out of concessions over 10 years for the IT industry.

However, Bajaj hoped that the hike in the dividend tax from 10 per cent to 20 per cent would be withdrawn next year alongwith the surcharge.

Welcoming the initiatives for the IT sector, the National Association of SME IT Companies of India said that the finance minister had clarified a situation which was leading to a crisis in the day-to-day working, invloving some 750 small and medium IT companies, bulk of which were exporters.

Goenka, however, said Sinha would also address some pressing problems being faced by the textile industry. The budget proposals relating to import duty in respect of textile produdcts had resulted in a serious adverse impact on domestic textile industry, particularly the synthetic textile segment.