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THE following measures recommended to be introduced for the financial year 2003-04:

(i) Reduction in corporate tax rate from the existing levels of 36.75 per cent to 30 per cent for domestic companies and to 35 per cent for foreign companies.

(ii) Exemption of dividend from taxation in the hands of the shareholders. No tax on distribution of dividends by a company.

(iii) Exemption of long-terms capital gains on listed equity.

(iv) Elimination of Minimum Alternate Tax under Section 115JB.

(v) Removal of the distinction between unabsorbed depreciation and unabsorbed business loss. Business loss to be allowed to be carried forward indefinitely.

(vi) Depreciation rates to be reduced to 15 per cent for the general category of plant and machinery.

(vii) Elimination of Section 33 AB relating to Tea development account, Section 33 AC relating to reserve for shipping business, Section 33 B relating to rehabilitation allowance, Section 35 relating to expenditure on scientific research, Section 35 CCA relating to expenditure by way of payment to associations and institutions for carrying out rural development programmes, Section 36(1)(iii) in respect of interest on borrowed capital.

(viii) Donations to trusts, institutions etc. engaged in scientific research to be allowed as tax rebate as in the case of Section 80G.

(ix) Elimination of Section 35 AC relating to expenditure on eligible projects. However, expenditure on projects already approved will continue to enjoy tax benefit in the form of rebate at the rate of 20 per cent.

(x) Provision for bad and doubtful debts allowable to be restricted to the amount of provision debited to profit and loss account as audited subject to the maximum amount of provisioning permitted under the prudential guidelines issued by the Reserve Bank of India.

(xi) The phase out programme in respect of sections 80HHB, 80HHBA, 80HHC, 80HHD, 80HHE, 80HHF, 80-O, 80R, 80RR and 80RRA to continue.

(xii) Removal of the following deductions under Section 10 and Chapter VI A of the Income Tax Act with immediate effect and not by a sunset clause:-

a) Elimination of Section 10A and 10B of the Income Tax Act for all tax payers other than those engaged in manufacturing computer software; for those in manufacturing computer software, the Government of India must take immediate steps to negotiate with foreign governments to enter into a comprehensive totalisation agreement leading to a single point incidence of taxes.

b) Section 80 IA in respect of profit and gains from industrial undertakings or enterprises engaged in infrastructure development or telecommunication service or development of industrial park or special economic zones or generation, transmission or distribution of power.

c) Section 80 IB in respect of profits and gains from certain industrial undertakings other then infrastructure development undertakings (this includes backward areas also).

d) Section 80 JJA in respect of profits and gains from business of collecting and processing of biodegradable wastes.

e) Section 80 JJAA in respect of employment of new workman.

f) Section 80 M in respect of inter corporate dividends.

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