2. Pruning MAT Rates: Minimum Alternate Tax (MAT) rates have been increasing more than the double from 7.5 percent in 2007 to 18.5 percent. Such higher rate of MAT brings a negative impact on tax incentives and exemptions.

Therefore, MAT levy, basically on special economic zones (SEZ) is expected to be reduced in in order to provide relief to the corporate sectors.

SEZs are the major export hubs, which contribute about one third of the country’s total exports and provide a huge employment opportunities. The deduction in investment will also be allowed to be reduced in computing MAT.

3. Rationalization of provisions of section 14A: Section 14 A is enacted such that net taxable income is actually taxed without allowing any deduction against taxable income for expenditure incurred in earning exempt income.

In the upcoming budget session the provisions of section 14 A read with Rule 8D is expected to be rationalized in case the DDT is converted to withholding tax for foreign investors.

4. Voluntary Litigation Settlement Scheme: Voluntary Litigation Settlement scheme is expected to be introduced in the budget session to provide relief to the tax payers.

 This scheme will enable the tax payers to pay the tax based on the guidelines according to the scheme with 50 percent interest excluding penal.This will lead in the collection of tax related to outstanding demands thereby reducing any further problems.

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