ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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More Tax Hand-Outs

More Tax Hand-Outs THE Chelliah Committee's major recommendation in the field of direct taxes in its final report is that the tax rate applicable to domestic companies be brought down from the present 51.75 per cent (inclusive of surcharge) in two stages, first to 45 per cent and the following year to 40 per cent. Correspondingly, the differential between the rate of tax on domestic companies and that payable by foreign companies is not to exceed 10 percentage points. It is relevant to recall that in his budget speech earlier this year the finance minister had given a clear indication of the working of his mind on the subject of corporate taxation. The corporate tax system, he had said, "is also an area where rates of taxation need to be lowered and I would like to give advance notice of my intention to begin lowering them as soon as possible". So the Chelliah Committee's recommendation should fit the finance minister's own thinking eminently, unless the latter was thinking in terms of an even more radical lowering of the corporate tax rate.

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