Budget 2001-2002

141. I have already promised that our customs tariff would be brought down to East Asian levels. I will like to move progressively within three years to reduce the number of rates to the minimum with a peak rate of 20%. The modalities for this will be worked out in time for the next budget.

142. Sir, a number of steps are also being taken for greater procedural and administrative efficiency.

143. A new Manual of Procedures and Instructions on Central Excise and Customs would be brought out by 1, September 2001. The emphasis would be on simplicity, brevity and transparency. I also propose to simplify the central excise rules to make them user friendly.

144. My proposals on the excise side are estimated to result in a revenue gain of Rs 4677 crore in a year. On the customs side my proposals are estimated to result in a revenue loss of Rs 2128 crore. I estimate that the indirect tax revenue next year would be Rs 1,40,992 crore.

145. Copies of the notifications issued to give effect to the changes in excise and customs duties shall be laid on the Table of the House in due course.

146. In Direct Taxes, my thrust during the last three years has been on providing stability of tax rates, widening the tax base, rationalizing and simplifying the tax laws and giving impetus to economic growth. These efforts have resulted in increasing the direct tax revenue from Rs 46,428 crore in 1998-99 to an estimated Rs 74,467 crore this year. In addition, the number of assessees has increased significantly from a little over one crore in March 1998 to 2.3 crore at the beginning of this year. I, therefore, propose to continue with the same rates this year also. Co-operative Societies, however, will henceforth pay 30% tax instead of 35%.

147. While imposing the surcharge of 10 % on corporates and non-corporates in my budget of 1999-2000, I had promised that this would be a temporary levy. However, I was constrained to increase the surcharge on non-corporate tax payers at the higher income levels to 15% due to the unexpected expenditure burden of Kargil. During the course of this financial year I had further levied a surchage of 1% on corporates towards the National Calamity Contingency Fund and an additional 2% on all tax payers for the Gujarat Earthquake relief. I now propose to remove all surcharges payable by corporates and non-corporates except the surcharge of 2 % for relief to quake hit areas of Gujarat. Individuals having an income of up to Rs 60,000/- will not be subject to this surcharge.

148. As a welfare measure, Sir, I propose to allow 100% deduction for donations to the National Trust for welfare of persons with autism, cerebral palsy, mental retardation and multiple disabilities.

149. Hon’ble Members are aware that the modified one-by-six scheme, which I introduced in the Finance Act, 1998 to identify potential income-tax assessees and to bring them into the tax net, has paid rich dividends. I, therefore, propose to extend the one-by-six scheme to all urban areas in the country as defined by the 1991 Census. Changes arising out of the 2001 census will be incorporated subsequently.

150. Certain companies are not filing their returns of income, presumably on the plea that they are not having any taxable income. These companies go out of fiscal discipline and their financial transactions during the initial years escape scrutiny. I therefore, propose that all companies should file their returns even if they incur a loss.