Major overhaul of direct taxes in the Budget.

Publication: PTI - The Press Trust of India Ltd.

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COPYRIGHT 2005 Asia Pulse Pte Ltd

New Delhi, Feb 28 (PTI) In a budget that seeks to give a major thrust to rural infrastructure and development, India's Finance Minister P Chidambaram Monday proposed a major overhaul of the direct tax structure providing relief to the lower and middle income groups, slashed the corporate tax and reduced the customs and excise duties on serveral commodities including petrol, diesel, subsidised kerosene and LPG.

However, in his second budget for the ruling government, he came down harsh on the smokers raising the sprecific excise rate on cigarettes by 10 per cent and impose a surcharge of 10 per cent on ad valorem duties on other tobacco products including gutka (flavoured tobacco), chewing tobacco and snuff.

He also raised the Securities Transaction Tax from 0.015 per cent to 0.002 and included more items under the Service Tax net while exempting small service providers with a gross turn over Rs.four lakh. His direct tax proposals will net in an additional Rs.6,000...

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