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Journalism of Courage
The tax measures announced by finance minister Jaswant Singh on Wednesday will have a marginal revenue impact.
According to revenue department officials, removal of 5 per cent service tax on life insurance premia is the only step which will have a direct impact on this year’s tax realisation. They said that service tax on life insurance premia had already been restricted to the risk portion only, and the current move is expected to result in a revenue loss of less than Rs 400 crore.
Officials said that as far as announcements on the direct tax side are concerned, revenue implications would be negligible. Increase in the exemption limit for tax deduction at source (TDS) for dividend income from Rs 1,000 to Rs 2,500 would mean that around Rs 300-400 crore TDS expected on this account will come when the concerned assessees file their return, said a Central Board of Direct Taxes (CBDT) official.
