A further dose of good news is that the Ministry has virtually ruled out any increase in the maximum marginal rate on the personal income-tax front as that may affect voluntary compliance.

With the general budget round the corner, the Finance Ministry on Thursday held out some hope for taxpayers by indicating that it could review direct tax rates and structures in the coming days on the back of buoyant revenues and some increase in voluntary compliance.

Reduction in corporate and income tax rates, lowering of excise duty and exemption from fringe benefit tax topped the wish list of industry bodies and corporates for Budget 2008-09.

The government on Thursday kickstarted the pre-Budget consultations with revenue secretary PV Bhide meeting corporate heads and industry chamber, including FICCI. Industry representatives asked Mr Bhide to reduce corporate tax to 25%, which currently works out to 33.9% including the surcharge and education cess.
Industrialists also requested for a technology upgrade fund for the paper industry. Merchant Chamber of Commerce from Kolkata demanded simplification of the tax regime, fringe benefit tax exemption to travel expenses and a white paper on the proposed goods and service tax.

While the last Budget of the ruling coalition is expected to be a populist one, industrialists said after their meeting that they received favourable feedback on many of the proposals.

With the Finance Ministry initiating the process of budget preparation, global consultancy KPMG said India will have to reduce its corporate taxes to woo more foreign investors into the country.

Sources : http://economictimes.indiatimes.com/