MUMBAI, July 3: The Indian Merchants Chamber (IMC) has cautioned the goverment against changing the existing provisions of computing capital gains on transfer of financial assets.

In a memorandum submitted to Finance Minister P Chidambaram, IMC has urged him to reject the suggestion to the contrary contained in the report of the expert group on rationalisation and simplification of income tax law.

The report had recommended replacement of the existing provision with a new one enunciating the concept of `block of financial assets' for computing capital gains on transfer of assets on the ground that such a step will obviate the need for an assessee to undertake a detailed excercise on the cost of assets to be sold.

Indian Merchant Chamber president Ram Gandhi pointed out that assessees would not benefit from the step because they will be required to continue to keep as many details for determining the value of the block as are being kept at present. The chamber has also opposed to the expert group's suggestion that profits and gains arising from sale of any unregistered capital (financial) asset should be taxable as speculation profits and not as capital gains. The chamber has termed as extremely unreasonable the group's suggestion to disallow 25 per cent of the travelling and entertainment expenses to directors.

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