April 26, 2002 | 1310 IST
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Money > PTI > Report April 26, 2002 | 1310 IST |
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Sinha rolls back cut on tax rebate partially, scraps tax on insurance premium He also rolled back the 4 per cent excise duty imposed on spare parts and accessories of bicycles, hand pumps, toys and umbrellas that will cost the exchequer Rs 21.57 billion. Announcing the sops while moving the Finance Bill 2002, for consideration in the Lok Sabha, he also removed the criterion of telephone under the one-by-six formula for mandatory filing of income tax returns, but retained the provision relating to mobile phone ownership. Sinha reduced the cut in tax rebate under section 88 to 15 per cent for incomes between Rs 150,000 and Rs 500,000. The original proposal had reduced the tax rebate in this bracket from 20 to 10 per cent. Sinha announced 100 per cent tax deduction to special economic zone (SEZ) units that have come up from April 1. He said cellular phone owners would, however, have to file income tax returns under the one-by-six scheme. He also announced exemption of inland air travel tax to Andaman and Nicobar islands, Lakshadweep and Leh. Earlier, this concession was announced for travel to the North-East. Excise duty of 4 per cent on pre-recorded cassettes would stand withdrawn to curb piracy, Sinha said. Aviation gas (fuel) will be exempted from special excise duty to reduce the cost of training of pilots in the country. While removing service tax on life insurance premium, the Sinha accepted the contention that the tax on these services should be confined to only risk premium. In a minor modification of the proposals relating to hike in postal rates, the finance minister retained the old rates for printed books in view of the fact that the current year has been declared as 'Year of the Books'. This will result in a revenue loss of Rs 70 million. Taking into account the earlier rollback of the hike in the price of cooking gas to the tune of Rs 7 billion, the total revenue loss to the exchequer on account of concessions since the presentation of the Budget will be Rs 28.57 billion, which Sinha described as 'not very significant' considering the overall budget size of Rs 4,100 billion. ALSO READ:
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Bowing to pressures from his Bharatiya Janata Party colleagues, the government's allies, and trade and industry bodies, Finance Minister Yashwant Sinha on Friday partially restored the income tax rebate under Sec 88 to 15 per cent, scrapped the proposed 5 per cent service tax on life insurance premium.