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Relook likely at fringe benefits tax

NEW DELHI, MARCH 1. The Government may revisit some of the aspects of the fringe benefits tax but was non-committal on the bank cash withdrawal tax in the Union budget for 2005-06 on which critical comments have come from political parties and other quarters.

"These are our proposals and suggestions, which are broadly accepted. We will go into them one by one. But if you point out that there are some things to be cleared, we will certainly look into it," the Union Finance Minister, P. Chidambaram, said today in an interaction with economists.

He specifically referred to sales promotion including publicity that had been included in the fringe benefits tax, which was pointed out in the interaction, and said "we will find out why it is there, what is the rationale."

Mr. Chidambaram declined to make any firm commitment saying Parliament was in session.

The Finance Minister, at the post budget briefing yesterday, had given some indications he was open to suggestions for a relook at the bank cash transaction tax, though he maintained it was not a revenue-generating measure.

However, today in interviews he appeared to stick to the budget proposal for 10 per cent tax on cash withdrawal of Rs. 10,000 from banks saying there were enough grounds to bring this as an anti-black money measure.

Mr. Chidambaram said the move was intended at keeping a tax trail of the black money transaction but he would not go into details. "I have a lot of information which you do not have. Lakhs of rupees in cash are withdrawn in this country everyday over which there is need to keep a trail," he said.

Disinvestment

Mr. Chidambaram said the Government proposed to raise Rs. 50,000 crores to Rs. 70,000 crores from the sale of stakes in public sector undertakings during the next five years. "I think over a period of five years, Rs. 50,000 to Rs. 70,000 crores will be raised for the National Investment Fund," he said.

The Minister was asked how much the Government hoped to raise from stake sales in state-run firms.

The Union budget 2005-06, presented to Parliament yesterday, did not set a target for raising funds from the sale of PSUs. The Left parties supporting the Congress-led coalition Government have taken the stand that they would not permit the sale of majority stake in profitable state enterprises, but a minority sell-off could be acceptable. — PTI, UNI

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