FBT, transaction tax fetch Rs 603 cr in Q1

As much as Rs 583 crore (Rs 5.83 billion) was collected from the Fringe Benefit Tax and Rs 20 crore (Rs 200 million) from Banking Cash Transaction Tax during the first quarter of this fiscal, the Lok Sabha was informed on Tuesday.

The government does not at present propose to withdraw BCTT since the primary objective of the levy is to check tax evasion and discourage cash transactions rather than to generate revenues, Minister of state for Finance S S Palanimanickam said.

BCTT came into effect on June 1 this year and the collections of the first quarter are for only one month, he said.

The collections from income tax, comprising corporate and personal categories, up to July 2005, are 26 per cent higher than the corresponding period of last year, Palanimanickam said.

India has attracted Rs 4,016 crore (Rs 40.16 billion) of foreign direct investment up to May this year, the Minister added.

Some of the main reasons behind high FDI inflow into China, which opened up more than a decade ahead of India, are preferential policies for FDI, including lower rates of taxes, world-class infrastructure with lower cost of services, liberal and flexible labour laws, he said.