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Budget India 97 Sponsered by [LOGO]

ChemOtech Fabcon Pvt Ltd.


FOR BOTH THE ASSESSEE

  1. An artificial disallowance in respect of expenditure on entertainment, advertisement, guest-house maintenance and traveling beyond prescribed limits are to be removed U/S 37. However, the disallowance in respect of advertisement in soverign of political parties U/S 37(2B) would continue.
  2. 100% deduction would be allowed in respect of donation made to chief ministers relief fund or the lieutenant Governor's relief fund of any state/union territory U/S 80G.
  3. Deduction from the business of poultry farming U/S 80JJ is to be withdrawn.
  4. It is proposed to restrict deduction U/S 80-O to consideration for the use outside India of any patent invention, design or registered trade mark. Accordingly earlier deduction available on income arising in consideration for use of secret formula, etc or information concerning industrial, commercial or scientific knowledge, experience or skill or professional or technical services is to be withdrawn.
  5. The voluntary disclosure of income and wealth scheme 1997 introduced in the finance bill 1997 will commence from the date of its notification in the Official Gazette and shall remain in force up to the 31st day of December 1997.

    The scheme shall have the following salient features :

    My Comments : This brings the idea to me that if the return of two years have not been furnished U/s 139(1), the same need not be furnished if 40% rate of tax is payable because under VDS scheme it comes to only 30% & 35% that means the saving of 10% & 5%.
  6. INTEREST TAX
    Rate of interest tax on Institutions, Bank and NBFC, is to be reduced from 3% to 2% on the chargeable interest.
  7. EXPENDITURE TAX
    Hotels exempts U/S. 80IA set up in hilly or rural areas or pilgrimage centre would be exempted from expenditure tax for a period upto 10 years (from 1.4.99 to 31.3.2009). The above said position is applicable to those hotels which starts functioning from 1.4.1998 to 31.3.2002
  8. SERVICE TAX
    Service tax is to be extended to services rendered by Tax on these activities would be at 5% advalorem.
  9. FERA
    The limit of aggregate investment in a company by FIIs, NRIs and OCBs is increased from 24% to 30%.

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