House panel for abolition of STT, no change in 30% corporate tax

A parliamentary panel on Friday recommended a host of measures, including abolishing the Securities Transaction Tax on trade of equities, but suggested that corporate income tax rate should be retained at the current level of 30%. HT reports. Tax leaks through loopholes

A parliamentary panel on Friday recommended a host of measures, including abolishing the Securities Transaction Tax on trade of equities, but suggested that corporate income tax rate should be retained at the current level of 30%.

“The committee does not recommend any change in the proposed rate of 30% corporate tax for companies. It is expected that the effective tax yield for companies will approximate to the nominal rate with the proposed transition to focussed investment-linked incentives and exemptions,” the Parliamentary Standing Committee on Finance headed by BJP leader and former finance minister Yashwant Sinha said in its report on the Direct Taxes Code Bill, 2010.

The committee is also for modifying the procedure for levying the capital gains tax to avoid evasion.

A government source said the finance ministry is actively considering reducing STT by 50%, to drive equity volumes.

A complete withdrawal of STT is, however, ruled out. STT is payable equally by the buyer and the seller at 0.125% of the transaction value of transactions. The report was submitted to Lok Sabha speaker Meira Kumar on Friday.