FBT, CTT Abolished, but MAT is Up
The government has abolished the Fringe Benefit Tax (FBT), a long standing demand of the industry, under the union budget 2009-10. The finance minister Pranab Mukherjee said that the tax was perceived as imposing an unnecessary burden on the industry and therefore it is being abolished on the advice of the prime minister.
The Minimum Alternate Tax (MAT), however, which is another tax that the industry had sought to abolish, has been raised from 10% of the booked profits to 15%.
The corporate tax rates have been left unchanged. The finance minister sought to justify it by saying that the growth in direct taxes had been lower due to the plethora of exemptions granted and the tax base has also not grown as expected.
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