Under the existing provisions of the Income-Tax Act, i.e. long-term capital gains, low rate of capital gains tax at 10 per cent, is applicable only to those securities which are listed. The chamber has proposed extension of this facility to UTI and units of mutual funds specified under section 10(23)D of Income-tax Act in the Finance Bill 2000-2001.

The present dispensation seeks to differentiate between securities listed on stock exchanges and those not listed. According to FICCI, this discrimination is neither fair nor warranted.

FICCI has also recommended lowering of corporate tax rates on companies and firms from the existing 35 to 30 per cent immediately and then to 25 per cent in the next two to three years.

FICCI states that the present rate of corporate tax is 38.5 per cent (inclusive of 10 per cent surcharge) is high as compared to the other countries. In most of the countries including Argentina, Brazil, Finland, Malaysia, Norway, Singapore, Sweden, etc., rates vary between 25 to 30 per cent. In some countries like Switzerland, Hong Kong, Hungary, the rates are even less than 25 per cent. In this global scenario, India must be in tune with others to be able to compete with them, it says.

In the case of personal income tax, FICCI has suggested that the maximum rate of 30 per cent should be made applicable only in case of income exceeding Rs 3 lakh. In the Finance Bill 2000-2001, it is proposed to raise the maximum marginal rate to 34.5 per cent (inclusive of surcharge) on income above the level of Rs 1.5 lakh. However, in countries like Hong Kong, China, etc., the maximum rate of 45 per cent applies to income above the equivalent of Indian Rs 70 lakh and its rate of 35 per cent is attracted on income above Rs 40 lakh.