The Finance Bill 2005 was passed by the Lok Sabha Monday after seeking to raise the exemption limit for cash withdrawal tax, giving more sops to women and senior citizens and ensuring that some business expenses do not come under the fringe benefit tax.

The lower house passed the Finance Bill, including the amendments, after a four-hour debate followed by an hour-long reply by Finance Minister P. Chidambaram.

Members of the opposition National Democratic Alliance, who had been boycotting parliamentary proceedings since April 27, participated in the debate.

As per the amendments, the cash withdrawal tax scheme now keeps all savings bank account holders out of its ambit and increases the daily cash withdrawal cap for individuals to Rs.25,000 from Rs.10,000.

For companies, the exemption limit has been raised to Rs.100,000 a day.

In his budget speech Feb 28, Chidambaram had proposed the new scheme to impose a tax of 0.1 percent on all cash withdrawals over Rs.10,000 per day with a view to curb black money.

The limit of Rs.10,000 was set for all types of assessees, whether they were individuals or companies. The finance minister had said that banks would also have to report deposits that are exempt from tax deducted at source on interest.

During the course of his reply, Chidambaram said he also proposed to enhance the income tax exemption limit for women and senior citizens to Rs.135,000 and Rs.185,000 respectively.

The original Finance Bill 2005 had proposed the exemption limits at Rs.125,000 for women and Rs.150,000 for senior citizens.

In the case of fringe benefit tax - which proposes a tax on the assumption that some expenditure incurred by businesses also accrue to employees - the finance minister sought to exempt expenses on sales promotion and advertising.

But certain other items continue to be under its purview, such as expenses on conferences, repairs and maintenance of cars, guesthouse and club facilities, foreign travel expenses and contribution to retirement funds.

Reacting to the amendments, industry chambers said the exemption of advertising and sales promotion was a welcome decision since these expenditures are purely incurred for business purposes.

"But the continuation of the fringe benefit tax at 30 percent would adversely affect the competitiveness of the corporate sector," the Federation of Indian Chambers of Commerce and Industry (FICCI) said.

"No member country of the Association of Southeast Asian Nations has the concept of fringe benefit tax in their tax laws and we should also follow the same practice," FICCI president Onkar S. Kanwar said.