The Hindu : Business : Parliamentary panel approves two bills

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Wednesday, Dec 14, 2005

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Parliamentary panel approves two bills

Special Correspondent

Nod for amendments in banking regulation Nod for amendments in banking regulation

Changes in Taxation Bill to streamline procedures Voting rights proportionate to shareholding of promoters in banks Banks will be enabled to issue preference shares

NEW DELHI: The Standing Committee on Finance has approved the Taxation Laws (Amendment) Bill, which seeks to rationalise and simplify further tax laws while plugging loopholes to check revenue leakages.

The panel headed by B. C. Khanduri also cleared a Bill amending the Banking Regulation Act to remove the 10 per cent ceiling on voting rights, enable banks to issue preference shares as also empower the Reserve Bank of India to revise the statutory guidelines for banks. In effect, it paves the way for the next generation reforms in the banking sector.

In its report on the taxation Bill tabled in Parliament on Tuesday, the panel said: "Amendments proposed in income-tax, customs and Central excise acts are mainly intended to rationalise and simplify certain procedures, widen the tax base and plug loopholes that lead to leakage in revenue."

The Bill seeks to streamline the approval and monitoring of charitable institutions, trusts, hospitals and scientific research institutions for the grant of tax exemptions.

In favour of a one-year timeframe for considering the applications of research bodies eligible for tax exemption, the panel said: "This move, as well as the proposal to do away with renewal of approvals, and making it mandatory for institutions to file their tax returns, would help in streamlining the approval and monitoring process." The House panel, however, proposed fine-tuning of some of the provisions in the Banking Regulation (Amendment) Bill of 2005.

Among other things, the Bill proposes removal of the 10 per cent ceiling on voting rights and makes it proportionate with the shareholding of the promoters in keeping with that provided in the Companies Act.

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