171. To encourage investments in weaving, processing and garment
sectors of the textile industry, I propose to allow accelerated depreciation at the rate
of 50% on plants and machinery purchased under the Technology Up-gradation Fund Scheme.
172. In order to give a boost to the commercial vehicles
sector presently facing recession, I propose to allow accelerated depreciation at the rate
of 50% on new commercial vehicles for one year.
173. Each of my past three budgets has provided for
increasing tax incentives for the housing sector. Sir, continuing with this practice, I
propose to further increase the maximum amount of deduction available for interest payable
on housing loans for self-occupied houses from rupees one lakh to rupees one and a half
lakhs.
174. For persons having income from house property, the
present deduction of 25 % of annual value for repairs etc. is proposed to be enhanced to
30%. However, there will be no further deductions, except for the expenditure incurred by
way of interest payment on housing loans.
175. I propose to extend the tax incentives allowed by way
of deduction or rebate on payments of LIC premium to all insurance companies that have
been approved by the Insurance Regulatory and Development Authority
176. The presence of multinational enterprises in India and
their ability to allocate profits in different jurisdictions by controlling prices in
intra-group transactions has made the issue of transfer pricing a matter of serious
concern. I had set up an Expert Group in November 1999 to examine the issues relating to
transfer pricing. Their report has been received, proposing a detailed structure for
transfer pricing legislation. Necessary legislative changes are being made in the Finance
Bill based on these recommendations.
177. The foreign telecasting channels will henceforth be
taxed in India, on their income computed in accordance with the provisions of the
Income-tax Act.
178. Sir, I propose to bring about a number of measures
that will be friendly to the taxpayer. The time limits for issue of refunds, reassessment
and reopening of assessments by the Income-tax Department are proposed to be reduced. The
Department will also no longer have power to withhold the refund due to an assessee.
Similarly, there will be no requirement to obtain a Tax Clearance Certificate under
section 230A from the Assessing Officer before transfer of immovable property. I also
propose to remove the discretion presently available in deciding the quantum of penalties.
Henceforth, a fixed amount of penalty will be leviable for most of the defaults.
179. Certain educational and medical institutions are
required to be approved for claiming tax exemption. At present, these institutions have to
file their application for approval to the Central Board of Direct Taxes. Sir, I propose
to delegate this power to Chief Commissioners of Income-tax.
180. To sum up, Sir, my proposals made in this Budget on
the Direct Taxes will result in a revenue loss of Rs 5,500 crore, which I propose to make
up with tax buoyancy and increased voluntary compliance. I estimate that the direct tax
revenue in 2001-2002 would be Rs 84,800 crore.
181. Mr. Speaker, Sir,
with these proposals I estimate total tax revenue receipts for the Centre at Rs 163031
crore and the fiscal deficit at Rs 116314 crore or 4.7% of GDP. I could have managed a
lesser fiscal deficit but that would have been possible only at the cost of growth, which
was unacceptable.
182. This is a budget for carrying forward the second generation of economic
reforms. This is a budget for growth. This is a budget for equity with efficiency. This is
a budget for a new deal to the people of India in the new millennium.
183. Mr. Speaker, Sir, with these words, I commend the budget to this
august house.
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