More Tax Concessions For Infrastructure & Housing
Pranab Mukherjee has proposed some more concessions in direct and indirect taxes, especially for infrastructure, housing and food processing industries, to push the country's growth.
The proposed measures were announced during Mukherjee's reply to the debate in the Lok Sabha, on the Finance Bill, presented by him July 6 as part of the national budget for the current fiscal.
Some of the new measures announced by him include:
Inclusion of new services under service tax only from Sep 1
Maintenance of road, highways exempted from service tax net
Interest deduction on education loan extended to legal guardians of students
Tax holiday on industrial parks till March 31, 2011, to push infrastructure
Tax relief to housing if ongoing projects are completed before 2012
Tax holiday on natural gas exploration extended to fourth round of auctions
Enhanced interest subsidy for buying houses of less than Rs.2 million
Tax holiday scheme extended for meat, poultry, marine, dairy products
Income tax deduction hiked for people with severe disability
The finance minister said he was aware of the numerous requests made during the debate to extend some more sops to the individual tax-payer and the corporate sector. Yet, he said, the fiscal situation had imposed severe constraints.
"Everybody is aware of the gravity of the situation."
Mukherjee also said he will stick to his promise of placing a draft direct tax code within 45 days of taking over as finance minister, and that it will be tabled in the winter session of parliament after discussions and debate.
"We will make some major changes in the tax administration and related laws in the country," he said. "Reforms will be very much on our agenda. It is a continuing process."
According to the minister, the country will return to a high growth path of 9 percent soon as the signs regarding that were positive. But for that, the farm sector also needed to grow by at least 4 percent per annum.
He also said it was because of the fiscal stimuli of the United Progressive Alliance (UPA) government since December last year amounting to Rs.2,140 billion ($42 billion) that India was able to grow by 6.7% last fiscal.