With these changes, the estimated revenue for 1999-2000 is expected to be Rs 59,235 crore. This does not mean that the Budget does not have its fair share of sops. To begin with, buyback of shares will not be treated as deemed dividend distribution. Thus, companies are spared the additional tax of 10 per cent. Demergers have been recognised for the first time.
Companies can now concentrate on their core sector and hive off other unviable divisions.
This will not lead to any capital gains tax in the hands of either company. Further, the provisions relating to carry forward and set off of the accumulated losses will be allowed to the resultant company. Procedural relaxation has also been announced in the case of amalgamations. Further, the eligibility for tax concession is contingent upon a minimum of 75 per cent of the fixed assets of the amalgamating company being absorbed in the amalgamated company. Infrastructure and other core units can claim tax benefits under section 80IA in relation to their profits within a period of 15 years.