Finance Minister P Chidambaram appears confident of eliminating revenue deficit by 2008-09, even as he begged to differ with Prime Minister’s Advisory Council that felt the task was difficult.
“I think so,” he replied to reporters when asked whether revenue deficit targets under the Fiscal Responsibility & Budgetary Management (FRBM) Act would be met.
Commenting on EAC’s report, Mr Chidambaram said the council did not say that the target would not be met, but only talked about difficulty in achieving the target. “There is subtle difference between difficult to meet and would not be met,” he said after a meeting with Chief Commissioners of Income Tax.
Meeting the target
FRBM Act has targeted revenue deficit to be wiped out by 2008-09. It was two per cent in 2006-07. “We have been right so far (in meeting revenue deficit target), there is no reason why we should be wrong next year,” he said.
Mr Chidambaram also expressed confidence that target of reducing fiscal deficit to 3.3 per cent of GDP as well as collecting Rs 2,67,490 crore direct tax revenues would be met this fiscal. “Whatever I have proposed in the Budget, I will achieve it,” he said.  He said total direct taxes collected for first three months stood at Rs 41,154 crore. “We are on target. I am confident that the targets (of direct tax collections this fiscal) would be achieved.” Corporation tax collection is estimated to grow at 17.44 per cent to touch over Rs 1,68,400 crore, while personal income tax is targeted to rise by 14.5 per cent to stand at over Rs 98,770 crore this fiscal.
Overall direct tax collections are estimated to grow by 16.31 per cent at Rs 2,67,490 crore this fiscal.
FAIR MARKET VALUE
FBT norms for ESOPs shortly
New Delhi, pti: The government will soon issue guidelines on determining fair market value of stock options given by companies to their employees for calculating fringe benefit tax, Finance Minister P Chidambaram said on Tuesday.
“Guidelines (on fair market value) would be issued shortly,” he told reporters after a conference of Income Tax Chief Commissioners here. He denied there was any ambiguity about taxing Employee Stock Options (ESOPs).
Mr Chidambaram had earlier said FBT on ESOPs would be calculated at the time of vesting the options to the employees and not at the time of allotment as was originally proposed in the Budget.
owever, this proposal was changed when Finance Bill was passed in the Parliament. The fair market value would now be determined when the company entitles a employee to get ESOPs at any later date.