- Need Of The Hour For The New Govt:
- Focus on jobs-led inclusive growth, quick policy reviews to regenerate investor interest by providing a predictable environment.
- Devise transparent measures to rein the swelling subsidy bill and new sources of non-tax revenue. This will help control inflation and send the right signal to rating agencies.
- Disinvestment or privatization of State-owned enterprises such as ONGC and Coal India to tackle the projected rise in food subsidy as a result of unpredictable monsoons.
- Simplify procedures for project clearances, preferably set up a single-window clearance facility for investments related to infrastructure projects.
- Suggest potential amendment in the Finance Act, 2012.
- The retrospective amendments to the act allowed taxing of the gains arising from the transfer of shares of a foreign entity in a case where such an entity has substantial assets located in India and had created an environment of uncertainty in the tax law and affected India’s reputation of being tax-friendly.
- The fiscal deficit needs to be combated.
- Provide tax breaks to individuals and leave them with more of their incomes to spend or invest. This will also buy time and room for tackling structural problems.
Future assessments of India’s credit profile will depend upon:
- Govt’s fiscal position.
- Regulatory curbs on investment and output
- Growth if social and physical infrastructure.
The economic growth will depend upon:
- Pace of policy bottlenecking.
- Investment appetite of the corporate sector.
- Govt’s role in capital formation.
What does the Finance Bill 2012 concern?
The provisions of the Finance Bill, 2012 relating to direct taxes seek to amend the Income-tax Act, inter alia, in order to provide for-
A. Tax rates
B. Widening of tax base
B. Widening of tax base
C. Measures to prevent generation and circulation of unaccounted money
D. Tax incentives and reliefs
E. Rationalization of Tax Deduction at Source (TDS) provisions
F. Rationalization of international taxation provisions
G. Rationalization of transfer pricing provisions
H. General Anti-Avoidance Rule
I. Other clarifications
2. The Finance Bill, 2012 seeks to prescribe the rates of income-tax on income liable to tax for the assessment year 2012-13; the rates at which tax will be deductible at source during the financial year 2012-13 from interest (including interest on securities), winnings from lotteries or crossword puzzles, winnings from horse races, card games and other categories of income liable to deduction or collection of tax at source under the Income-tax Act; rates for computation of “advance tax”, deduction of income-tax from, or payment of tax on, ‘Salaries’ and charging of income-tax on current incomes in certain cases for the financial year 2012-13.