PROFESSIONALTAX
Cap may go up by three times
.VRISHTI BENIWAL
New Delhi, 2 January
After more than two decades, the government is planning an over three-fold increase in the ceiling on professional tax levied by states. A Cabinet note is being prepared to amend the Constitution so as to provide for increase in the cap from ~2,500 per annum at present to ~8,500 a year. The issue will be discussed next week at a meeting of the Empowered Committee of State Finance Ministers.
Article 276 of the Constitution empowers the states to levy tax on professions, trades, callings and employments. But, state legislatures are free to decide the tax amount, subject to a ceiling of ~2,500, and the professions they want to tax under their respective laws on professional tax. This will not be subsumed in the proposed goods & services tax (GST).
The cap was last increased in 1988 — from ~250 a year originally given under the Constitution. Some states have now proposed to the finance ministry to increase the limit further to ~8,500. The ministry has invited comments from various stakeholders. Once the Empowered Committee discusses the matter at its meeting in Bhopal on January 9, it will seek Cabinet nod to table a Constitutional Amendment Bill in Parliament.
Finance ministry officials say the idea is to enable state governments and local bodies increase their revenues by directly levying tax on professionals. Maharashtra, with an annual revenue of about ~250 crore from tax on roughly 60 professions, is the biggest proponent of a higher ceiling, according to one official.
Apart from Maharashtra, states such as Andhra Pradesh, Assam, Chhattisgarh, Gujarat, Karnataka, Madhya Pradesh, Orissa, Punjab, Rajasthan, Sikkim, Tamil Nadu and West Bengal also have their Acts governing tax on professionals. The slabs and professional tax rates vary from state to state. For instance, Maharashtra levies a monthly professional tax of ~200 on income above ~10,000, while West Bengal collects the same amount of tax when the payer’s monthly income breaches ~40,000.
Professional tax is a kind of direct tax collected by local municipal bodies in addition to the income tax levied by the Centre. It is collected from businessmen, working individuals, merchants and people involved in various occupations.
SEBI board meet: PSU bank's fund-raising tops agenda business line
Mumbai, Jan. 2:
The board of stock market regulator SEBI is set to meet on Tuesday, confirmed sources.
The most prominent item on the agenda is the process by which PSUs may be allowed to raise money through the auction route.
Discussion on buyback of PSU shares is also on the agenda.
Another issue on the agenda could be the direct entry of qualified foreign investors (QFI).
“It would be interesting to see how the regulator goes about implementing its steps to curb round tripping of funds through the QFI route,” said a Vice President-IPO distribution of an Indian Financial services firm.
NRIs and OCBs were banned from directly entering Indian capital market after the Ketan Parekh scam broke out.
The government has spelt out the procedure for QFI investments in India.
Investment is restricted to QFIs who belong to countries that are signatories of the International Organisation of Securities Commissions', Financial Action Task Force (FATF) recommendations.
FATF is an inter-governmental policy making body that has published 49 recommendations, focussing on prevention of money laundering and terrorist financing.
raghavendrarao.k@thehindu
Foreign individuals can invest in public issues source business line
Our Bureau
New Delhi. Jan 2:
A foreign Individual, a foreign pension fund or even a foreign trust can invest in initial public offerings (IPOs) or follow-on public offers (FPOs) of Indian companies.
The Government on Monday clarified that such ‘qualified foreign investors' (QFIs) will be allowed to invest in public offers. The clarification followed Sunday's announcement allowing QFIs direct entry into the Indian equity market.
A senior Finance Ministry official said, “QFIs can invest under the retail category in an IPO or FPO.” It means such an investor can make application up to an amount of Rs 2 lakh which is threshold for retail investor. The market regulator prescribes a minimum of 35 per cent of total shares offered under an issue for retail investors.
Meanwhile, Sunday's announcement failed to excite the stock market on the first trading day of 2012. The benchmark BSE Sensex index index witnessed a movement of 185 points before settling at 15,517.92 with a gain of just 63 points over its previous close.
Talking about voting rights for QFIs, the official said that the matter was “under discussion.” He hoped that details about such an issue will be part of the market regulator Securities and Exchange Board of India's (SEBI) notification on QFIs' investment in the equity market. The notification is expected to be out by January 15.
Meanwhile, Mr R Gopalan, Secretary, Department of Economic Affairs, said, “This (allowing QFI to invest directly) is a very significant step. We were looking at how to increase inflows in the market... the good thing is that unlike FII money, which is deemed to be hot money, people will put money in this for a longer period of time.”
He also said the government was looking at ways to dispense with the need for an income tax permanent account number (PAN) for foreign investors investing money in the equity market, as required under the existing ‘KnowYour Customer' (KYC) and regulatory norms.
“We are looking at the situation where they can dispense with PAN, but as of, now they will have to use PANs,” Mr Gopalan said.
Meanwhile, four out of eight applications for depository participant for QFI have been cleared. They are Kotak, HSBC, Citibank and Deutche Bank. QFIs can open demat accounts with these DPs.
Shishir.s@thehindu.co.in
No comments:
Post a Comment