An across-the-board surcharge of 10 per cent on corporate tax and a 10 per surcharge on all other categories of assessees have also been proposed. The estimated revenue from direct taxes in 1999-2000 would be Rs 59,235 crore. Additional Rs 3,100 crore are expected to be mobilised.

In the case of amalgamation of companies, the existing requirement of routing the proposal through Board of Industrial and Financial Reconstruction is proposed to be removed.

The legal provision is proposed to be amended so that the eligibility for tax concessions is only contingent upon a minimum of 75 per cent of the fixed assets of the amalgamating company being absorbed in the amalgamated company. This is subject to the condition that the amalgamated company willcontinue the business of the amalgamating company for a minimum of five years. An enabling provision will be provided through the amendment of the Income-Tax Act for the detailed guidelines to be issued subsequently under the powers available from the statutory provision. Legal provisions would be amended so that the companies involved and the shareholders are not subject to capital gains tax as a result of the transactions.

Sinha proposed "a substantial fiscal package to restore the confidence of the shareholders in the UTI, and more generally to invigorate the capital markets."

The finance minister has also proposed to cap capital gains tax for resident Indians on transfer of shares and securities at the 10 per cent rate. This would do away with the discrepancy between the rate of long-term capital gains tax on transfer of shares and securities between resident and non-resident Indians.