| I- T surcharge likely on income above ₹ 1 crore |
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New Delhi, 7 February Those with taxable income of more than ₹ 1 crore ayear could be in for taxing times, with the government considering an surcharge on the " super- rich" in Budget 2013- 14, to boost its revenue. The government is undertaking an exercise to estimate how much more tax can be collected if a surcharge is imposed on either of the two brackets — individuals with income above ₹ 50 lakh and those above ₹ 1 crore. There are 410,000 people with income above ₹ 20 lakh. However, no public data are available for those in the ₹ 1- crore- plus bracket. Finance ministry officials said to levy a tax on the superrich, it was important to first define the term. The government is cautious the threshold is not so high that the tax department gets little revenue boost or so low that it hurts a large chunk of the taxpayer base. "We have to see how to define super- rich. A leading industrialist and his assistant pay the same tax," said an official, asking not to be named. Also, in a pre- Budget meeting with Finance Minister P Chidambaram, an economist is learnt to have complained he and one of the richest business tycoons in the country were paying tax at the same rate. A surcharge is an additional levy on a tax an individual pays. For example, if the tax on an income of ₹ 1 crore is ₹ 30 lakh and a surcharge of 10 per cent is levied, the total tax liability on the taxpayer would be ₹ 33 lakh. The ministry might not tinker with the existing I- T slabs. It fears raising the exemption limit from the current ₹ 2 lakh would take many people out of the tax net, besides implying a higher exemption for all taxpayers and higher revenue loss for the government. Currently, tax is levied at 10 per cent on annual income between ₹ 2 lakh and 5 lakh, and at 20 per cent between ₹ 5 lakh and 10 lakh. Income above ₹ 10 lakh is taxed at 30 per cent. A tax on the super- rich with income over ₹ 1 crore might not add much to the government's revenues, but it would send a signal that it is looking to protect the poor and tax the rich. Though most of India Inc has opposed tax on the superrich at a higher rate, Wipro Chairman Azim Premji recently supported it, saying it sounded aright political move. Prime Minister's Economic Advisory Council Chairman C Rangarajan had also said a surcharge should be added for income above a particular level. For full report, visit goo. gl/ swy5f Also being considered is ₹ 50 lakh- 1 cr taxable income bracket BS REPORTER TAXING TIMES Estimated number of taxpayers and tax collected in 2011- 12 No. of taxpayers % of Tax collected % of tax Slab ( in ₹) ( in million) taxpayers ( in ₹ crore) collected >0- 5 lakh 28.84 89 15,010 10.1 5- 10 lakh 1.79 5.5 21,976 14.8 >10- 20 lakh 1.38 4.3 17,858 12.1 Above 20 lakh 0.41 1.3 93,229 63 >Total 32.41 100 1,48,073 100 Source: Standing Committee Report on DTC RUN- UP TO THE BUDGET 2013- 14 |
| Sebi saves Nalco offer by changing rule |
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Mumbai, 7 February The Securities and Exchange Board of India ( Sebi) has saved the ₹ 1,500crore offer for sale ( OFS) of stateowned National Aluminium (Nalco) from going bust by altering akey criterion in the regulatory framework. Nalco is one of the important candidates identified for the Union governments ₹ 30,000- crore disinvestment programme for 2012- 13. The Centre plans to sell 12.5 per cent in the Odisha- based mining company and has appointed Enam Securities, SBI Caps and IDFC to conduct the OFS. An OFS on the stock exchange is anew method of divestment introduced by Sebi to enable promoters and promoter- group shareholders to sell their shares to the public. It has emerged as a quick and efficient mechanism over the past year. However, not all companies could opt for this route. The regulatory framework allowed only the top 100 companies by market capitalisation to do so. Among the rest, only those which had to meet the minimum public shareholding norms were allowed. When the disinvestment plan was cleared by the Union Cabinet, Nalco was the 83rd largest company by market capitalisation and was eligible for an OFS. Between the end of September and early November, however, the stock fell alittle over 12 per cent, to around ₹ 45. It remained at these levels till early December before recovering. For the quarter- ended December, the shares lost around four per cent, when the broader market represented by the Sensex gained 3.5 per cent. This, in turn, dragged down the average market capitalisation and it was no longer a company in the top 100. Turn to TSI, Page 2 > ₹ 1,500- cr divestment would have been derailed but for the January 25 circular which rescued it |Govt planned to raise ₹ 1,500 crore through share sale |Cabinet cleared OFS and bankers appointed |But, stock price dipped in a rising market; firm fell off the top 100 list; ineligible for OFS |Sebi alters criteria, Nalco sale back from dead SAVING NALCO ISSUE Data compiled by BS Research Bureau 105 100 95 90 85 Sep 28, 12 Dec 31,' 12 Base= 100 Sensex 103.54 95.99 National Aluminium |
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| Click: Article continued from…Sebi saves Nalco offer |
| Sebi saves Nalco offer by ... |
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But, taking other divestment routes such as a follow- on public offering would have entailed fresh Request For Proposals, offer documents and Sebi approvals. Time was not on the issue's side, as the divestment calendar practically closes with the Union Budget in late February. As North Block scampered to save the issue, Sebi came into play. A board meeting on January 18 cleared a proposal to relax the eligibility criteria for OFS. In a circular dated January 25, it said, " All promoters/ promoter group entities of the top 100 companies by market capitalisation in any of the last four completed quarters, market capitalisation being calculated as average market capitalisation in a quarter," would be eligible to sell shares through OFS. As it was in the top 100 list in the previous three quarters, the Nalco OFS, in suspended animation for well over two months, sprang to life after this move. An investment banker, who didn't wish to be named, confirmed the change in calculation criteria for the top 100 was done to aid the Nalco offering. " The issue was supposed to take place in the third quarter; however, the government decided to postpone it to the fourth quarter. In January, the department of disinvestment and merchant bankers realised the company had slipped below the top 100 and, hence, doesn't qualify for OFS. Accordingly, feedback was given to Sebi, which found a way out," he said. An email seeking comments, sent to Sebi yesterday, did not elicit any response. Along with Nalco, nine other companies will benefit by this relaxation. Four of these companies are state- controlled – MRPL, Bharat Electronics and Petronet LNG. >FROM TSI, PAGE 1 |
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Company Secretary, Chennai
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