Govt slaps tremor tax -- 2% extra on your income tax

Govt slaps tremor tax -- 2% extra on your income tax
AGENCIES

NEW DELHI, FEBRUARY 1: In what the Government says will raise Rs 1,300 crore for quake-hit Gujarat, the Cabinet today decided to levy a two per cent additional surcharge on income tax payable by persons having an income of Rs 60,000 and above for the assessment year 2001-2002.

A further surcharge at the rate of two per cent would also be levied on the taxes payable by companies for this period.

The Union Cabinet, which met this evening, decided to promulgate ``Taxation Laws Amendment Ordinance 2001'' to give effect to the decisions, Parliamentary Affairs Minister Pramod Mahajan said.

Mahajan said that the additional revenue generated will be utilised for the reconstruction and rehabilitation in the quake-hit areas of Gujarat. He clarified the levies and surcharge imposed earlier would continue to be in vogue.

A Bill replacing the ordinance would be moved in the coming budget session of Parliament, he said.

He said though the session had been called, this ordinance was being promulgated in view of the ``exceptional and extraordinary situation'' and hoped all political parties would support it.

The Income Tax Act will be amended to provide for 100 per cent deduction on donation made to charitable institutions for providing relief to quake victims.

It was clarified that the benefit of Section 35 a(C) of the Act will be available to all assessees, including corporates, who take up relief work.

Five conditions have been set down for institutions qualifying for 100 per cent exemption. They will be registered under Section 80G of the Income Tax Act and the institutions will have to maintain separate accounts of income and expenditure for providing relief. Exemptions will be given to donations received on or before September 30 this year.

The amount will have to be utilised by March 31 next year (2002), and any amount not utilised by that date will be credited to the Prime Minister's national relief fund. All accounts will have to be submitted to the Central Board of Direct Taxes by June 30, 2002.

Materials including those for construction imported from abroad will be exempted from import duty, and indigenously produced material for quake relief will be exempted from excise duty.

The Income Tax Act will be amended to provide for 100 per cent deduction on donation made to charitable institutions for providing relief to quake victims.

Meanwhile, in Gandhidam, state Chief Minister Keshubhai Patel said that property worth upto Rs 15,000 crore had been destroyed across the state.

``It will need a massive effort to rehabilitate the affected people and government will leave no stone unturned,'' he said touring the worst-hit Kutch region adding that death toll could go to 30,000 to 35,000.

Earlier, Patel had written a letter to the Prime Minister suggesting that the Centre approach multilateral financial institutions like the World Bank and the Asian Development Bank for seeking $1 billion for relief and rehabilitation purposes.