Modified DTC Bill likely to come out soon, says Shome
Parthasarathy Shome, advisor to the finance minister, told businessmen here at a conference organised by industry chamber Ficci that demanding more sectors to be classified as infrastructure would actually go against the philosophy of widening the taxpayer base and lowering the rates. “If you are of the opinion that the taxbase should become narrower (by defining more sectors as infrastructure), then the argument for lowering the headline rates becomes sort of less saleable when revenue is also a criterion,” Shome said.
The revenue implications of income tax holiday for infrastructure firms falls on non-infrastructure sectors as the tax department will have to depend on them more for revenue since the tax base is finite. Now sectors like power, laying of transmission networks, building of road, bridges, ports and telecom, internet and domestic satellite services get full income tax break for ten years under section 80IA of the Income Tax Act. Industrial undertakings get 25% tax break for 10 years. Besides, many other businesses such as setting up of housing projects, hotels and convention centres in specified areas get partial or full income tax breaks for specified number of years. Still there is clamour from
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