Tax rates remained unchanged, both for individuals as well as corporates. The major impact areas for individuals according to me are Fringe Benefit Tax FBT, the most debated levy introduced last year, sought to tax the employer on expenditure incurred towards any facilities provided to its employees. The tax, however, was so structured to include within its ambit taxation of certain expenses wholly unconnected with employees.
The FM stated that he has reviewed rationalisation of FBT with an open mind in response to demands from industry and chambers of commerce. The Government justified the levy of FBT on the grounds of equity.
The following rationalisation was proposed: Reduced valuation of Fringe Benefit in respect of tour and travel at 5 per cent against 20 per cent. Concessional valuation of 5 per cent against 20 per cent in case of hospitality and hotel lodging and boarding expenses incurred by the airline and shipping industry Banking Cash Transaction Tax This levy was introduced last year to prevent black money. However, BCTT remains unaffected and the FM referred to it a boon for the remarkable trail it has established.