Ahead of the Union Budget, the United Progressive Alliance ally Left parties on Thursday proposed introduction of inheritance tax and restoration of long term capital gains tax to mop up additional resources for funding mega social sector schemes and infrastructure projects.
Presenting a 13-point note on alternative resource mobilisation measures to Finance Minister P Chidambaram in New Delhi, the Left parties also suggested for expanding the scope of services tax, increasing corporate tax and imposition of tax on luxury consumption.
Abolition of long-term capital gains tax discriminated against other productive sectors of the economy, CPI(M) general secretary Prakash Karat told reporters after the meeting. "Why should the capital market be given the special preference," he asked. The Left parties also proposed increasing the rate of securities transaction tax, Karat said.
As part of taxing the rich, the comrades also called for introduction of inheritance tax in line with western countries, he said.
"We don't say that whatever is inherited should be taxed. But over a limit, a tax should be imposed on inheritance," he added. The Left parties also proposed imposition of tax on luxury consumption, which has increased tremendously in recent times, Karat said.
The Left parties will meet Chidambaram for another round of discussion on expenditure before the Union Budget, CPI general secretary A B Bardhan said.