Finance minister Jaswant Singh today announced a slew of tax incentives for small investors, including a hike in the threshold for tax deduction at source on dividends from Rs 1,000 to Rs 2,500, removal of the service tax on life insurance premiums and an increase in the benefit under Section 80L of the Income Tax Act to Rs 15,000 from the existing Rs 12,000.
Winding up the discussion on the supplementary demands for grants in the Lok Sabha, Singh also announced new tax-free bonds to encourage small savings. The bonds, which will have a six-year maturity, will carry 7 per cent annual interest.
The government will soon launch Indian depository receipts (IDRs) to allow Indian companies to invest abroad in major overseas corporates as well as NRI ventures. This would be in addition to ADRs, GDRs and foreign currency convertible bonds, Singh said.
Singh also announced the setting up of a Serious Frauds Office under the department of company affairs in his ministry to investigate corporate fraud and malpractice in statutory accounting.