Indian industry wants corporate income tax reduced. It has also sought incentives to encourage overseas investment by domestic companies.
These are among the proposals put forward by corporate leaders during their pre-budget meeting with Finance Minister P Chidambaram on Tuesday.
The basic corporate tax rate may already be 30 per cent, but India Inc believes that the effective rate of corporate taxation, which includes a 10 per cent surcharge, fringe benefit tax and dividend distribution tax means a tax rate of 40 per cent.
“It will be more efficient to have one single rate of taxation rather than have a number of cesses and surcharges that only complicate the estimation of tax burden with little or no gain," said CII president R. Seshasayee.
The CII has also repeated its call for abolition of the fringe benefit tax (FBT) and said the industry would be willing to pay an additional one per cent corporate tax on its total income in lieu of FBT.
Tata Sons Chairman Ratan Tata sought higher incentives for tourism and hospitality sector.
Chairman of Videocon Industries and senior vice-president of Assocham Venugopal Dhoot said a mechanism should be developed to encourage Indian investment in overseas countries, which would assist mergers and acquisitions by domestic companies.
Ranbaxy Laboratories Managing Director Malvinder Mohan Singh and Nicholas Piramal Group's Director Swati Piramal called for providing fiscal incentives for research and development in drugs and pharmaceuticals.