IDEAS home Printed from https://ideas.repec.org/p/iim/iimawp/wp00644.html
   My bibliography  Save this paper

Ivestment Allowance Vs. General Tax Reduction Evaluation of Policy Option

Author

Listed:
  • Gupta Ramesh
  • Srinivasan G

Abstract

The paper evaluates the general tax reduction in lieu of investment allowance. The general tax reduction affects the tax rates and has universal impact, while investment allowance helps lower the tax base and thus, affects different tax payers differently. By analyzing the impact of two alternatives on acceptance of a new project and relating it to existing operations, it is concluded that under the Finance Minister’s proposal of reducing tax rates from 52.5 per cent to 45 per cent in lieu of investment allowance, the companies to be adversely affected are those which have at minimum more than 20 per cent growth in their profits. Not many companies are growing at that rate. Further research is advocated in the area of replacement cost depreciation and productive capacity creation, utilization and its profitability.

Suggested Citation

  • Gupta Ramesh & Srinivasan G, 1985. "Ivestment Allowance Vs. General Tax Reduction Evaluation of Policy Option," IIMA Working Papers WP1985-07-01_00644, Indian Institute of Management Ahmedabad, Research and Publication Department.
  • Handle: RePEc:iim:iimawp:wp00644
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iim:iimawp:wp00644. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (). General contact details of provider: http://edirc.repec.org/data/eciimin.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.